The first paper boat is located at the Mine Shack:
The second paper boat is located at the Cove:
The third paper boat is located at the Coffee Shop:
The fourth paper boat is located at the Beach:
The fifth paper boat is located at the Underground Pool. It will appear in the window:
The sixth paper boat is located at the Pet Shop:
The seventh paper boat is located at the Dock:
The eighth paper boat is located at the Ice Berg:
Once you have completed collecting all the paper boats you will be asked to match the paper boats you found. AFTER YOU FINISH CLICK ON CLAIM PRIZE. It should look like this
Also, Rockhopper has brought along his rare items! There is one cheat which is how to get the Life Ring. Click the Steering Wheel: (Click to enlarge.)
Waddle On!