If you have much in the way of luggage, then going via Euston Square will be less painful than the deep level tube.
As HowardGWR has said, you want the bit of underground that is accessed from the footbridge towards the 'country' end of the platforms at Paddington, rather than the bit where you go out on to the station concourse first.
The walking speed on things like the TfL journey planner does default to quite a slow walking speed. I'd say 5 minutes from Euston Square to Euston is a reasonable average (so long as you take the right exit at Euston Square)
The
timetable for the 205 says maximum 20 minutes once you're on the bus from Paddington to Euston, and buses every 7-8 minutes during the daytime. But as others have said, first off if you have a through train ticket, this won't be valid. Also, running buses in London is not an exact science, and the timetable should be seen as a statement of intent rather than something that will actually happen.