I personally, as a Tankadin, don't like Holy Priests much. I always wind up with less mana then with any other healer. Shadow Priests on the other hand are awesome for a Tankadin, and as mentioned, Holy Paladins make the best single target healers, so if it were my group that's how I'd suggest rolling. But at the same time, if that's not what's funnest for you guys, don't do it.
Conversely I think you'd be perfectly fine going with Shadow Priest/Ret Paladin as well. The streaming heals should be enough to keep everyone comfortable while questing/grinding and for instances at lower levels you can still do just fine healing with either the Priest or Paladin. If you do that though, and don't want to worry about finding a healer for instances at 60+ levels one of you will need to respec though.