My first priest was Holy all the way, and it does make healing easier.
My second priest (click my signature, that one) is pure shadow, but with more +healing than damage. I've not come across an instance I can't heal yet, and when it comes to bosses I pop shadow form on, vampiric embrace and damage the hell out of them... bosses health goes down like a rocket and everyone's health stays at max. Sweet.
The last patch nerfed Vamp Embrace, the heals it does can't crit anymore, and it gets slightly less of a bonus from your +healing stuff... I haven't found this to be a problem.
I'd reccomend staying shadow, get as much healing kit as you can (+damage AND healing preferably). Simply don't tell the groups you go with, let them see how good a healer you are, build a reputation for yourself
Edit: Once I hit 50 and get Vampiric Touch, I'd thought about putting the remaining 20 points into Holy, just to get Improved Renew, Divine Fury and Improved Healing. As there's nothing more I really want from the Shadow tree after Vamp Touch.