Paper Mario Badges:
I'll list all the badges, how to get them, how much BP (and FP) they cost, and what they do in battle or outside of battle here.

WARNING SPOILERS AHEAD! Don't look if you don't want any badges or plot spoiled!


Badges that appear in the "Jump" command:

D-Down Jump:
Where it is found: In Tubba Blubba's castle, blow up the cracked wall to reveal wood holes in the floor which after you hit, shows you where the D-Down Jump badge is.
How much BP it costs: 2
How much FP it costs: 2
What it does: It attacks enemies and rids of an enemies defense power.

Dizzy Stomp:
Where it is found: In Mt. Lavalava, it's hidden near the chest where you pick up the Ultra Hammer. Enter the room and use Parakarry's ability to reach the other side of the map. Open the chest on the ledge to find the Dizzy Stomp badge.
How much BP it costs: 1
How much FP it costs: 2
What it does: It may dizzy any enemies you have stomped on.

Jump Charge:
Where it is found: Appears in Rowf's Badge Shop for 50 coins.
How much BP it costs: 1
How much FP it costs: 1
What it does: Raises your jump attack by 2, but once you attack, it fades away.

Mega Jump:
Where it is found: On the path to the Crystal Palace, on the first ledge of the stairs, keep going right until you find a red ? block. Hit it to obtain the Mega jump badge.
How much BP it costs: 3
How much FP it costs: 6
What it does: It does Major damage to any enemy you have jumped on.

Multibounce:
Where it is found: Appears in Rowf's Badge Shop for 75 coins.
How much BP it costs: 1
How much FP it costs: 2
What it does: It lets you jump on multiple enemies in row but beware of spiked enemies, unless you have the Spike Shield badge equipped.

Power Bounce:
Where it is found: When you see a pink badge, go through the fake wall that the Koopa Troopa did.
How much BP it costs: 2
How much FP it costs: 3
What it does: You can jump on enemies for however long you can keep up your timed attacks for. Right when you use this badge for the first time your current number of Power Bounces will be displayed in Mario's house. Get a good high score!

Power Jump:
Where it is found: Goompa gives it to you at the beginning of the game.
How much BP it costs: 1
How much FP it costs: 2
What it does: It does more damage than your regular jump attack.

Shrink Stomp:
Where it is found: By the first Blooper in the Toad Town Tunnels.
How much BP it costs: 1
How much FP it costs: 2
What it does: It may shrink enemies.

Sleep Stomp:
Where it is found: Appears in Rowf's Badge Shop for 75 coins.
How much BP it costs: 1
How much FP it costs: 2
What it does: It may put enemies to sleep.

S. Jump Charge:
Where it is found: When you first enter Cloudy Climb, jump on the small cloud moving near the bigger one. Hop on to the bigger one and walk left to receive this badge.
How much BP it costs: 2
How much FP it costs: 4
What it does: It charges your jump attack by 3, but once you attack, it fades away.

Badges that appear in the "Hammer" command:

D-Down Pound:
Where it is found: Appears in Rowf's Badge Shop for 75 coins.
How much BP it costs: 2
How much FP it costs: 2
What it does: It attacks enemies and rids of an enemies defense power.

Hammer Throw:
Where it is found: Right before you enter Toad Town, hit the tree with your hammer to reveal a spring. Jump on the spring to reveal a chest. Open the chest to reveal the Hammer Throw badge!
How much BP it costs: 2
How much FP it costs: 2
What it does: Lets you throw your hammer at an enemy no matter where it is.

Mega Quake:
Where it is found: Buy from Rowf for 200 coins.
How much BP it costs: 3
How much FP it costs: 7
What it does: It damages all enemies, flips shell enemies over, and removes all enemies from the ceiling. It is more powerful than the Power Quake badge as well.

Mega Smash:
Where it is found: In Flower Fields, in the room before the sun tower, blow up the rock with Bombette's ability and jump down to receive the Mega Smash badge.
How much BP it costs: 3
How much FP it costs: 6
What it does: In battle it does more damage than your regular hammer attack.

Power Quake:
Where it is found: In the Jade Jungle, it is located inside of the red block on a small island.
How much BP it costs: 2
How much FP it costs: 4
What it does: It damages all enemies, flips shell enemies over, and removes all enemies from the ceiling. It does more damage than the normal Quake Hammer badge as well.

Power Smash:
Where it is found: Near the Electro-Blooper in the Toad Town Tunnels.
How much BP it costs: 1
How much FP it costs: 2
What it does: It does more damage than your regular hammer attack.

Quake Hammer:
Where it is found: When you receive Parakarry, fly past both ledges in Mt. Rugged to receive the Quake Hammer badge.
How much BP it costs: 1
How much FP it costs: 2
What it does: It damages all enemies, flips shell enemies over, and removes all enemies from the ceiling.

Smash Charge:
Where it is found: In a chest near the top of the Koopa Bros. Fortress.
How much BP it costs: 1
How much FP it costs: 1
What it does: Raises your hammer attack by 2, but once you attack, it fades away.

Spin Smash:
Where it is found: Appears in Rowf's Badge Shop for 75 coins.
How much BP it costs: 1
How much FP it costs: 2
What it does: If you hit an enemy it will make that enemy fly back and hit whoever's behind them.

S. Smash Charge:
Where it is found: Buy from Rowf at the badge shop for 100 coins.
How much BP it costs: 2
How much FP it costs: 4
What it does: It raises your hammer attack by 3, but once you attack, it fades away.

Badges that appear in the "Item" commmand:

Double Dip:
Where it is found: From Rowf's Badge Shop for 100 coins.
How much BP it costs: 1
How much FP it costs: 3
What it does: When you use this badge, you can use 2 items instead of just one.

Triple Dip:
Where it is found: In the Crystal Palace, near the first red switch, blow up the wall to your right and find this badge in a chest.
How much BP it costs: 3
How much FP it costs: 6
What it does: When you use this badge, you can use 3 items instead of just one.

"Miscellaneous" Badges:

All or Nothing:
Where it is found: Buy this from Rowf at the badge shop for 100 coins.
How much BP it costs: 4
What it does: If you succesfully use the action command, Mario deals more damage, if you don't use the action command, Mario deals 0 damage.

Attack FX A:
Where it is found: Buy this badge from Merlow at the Shooting Star Summit for 1 Star Piece.
How much BP it costs: 0
What it does: It changes the sound of Mario's attack.

Attack FX B:
Where it is found: Outside of the Koopa Village, hit the three blocks in a certain order to bring up a red block which contains the Attack FX B badge.
How much BP it costs: 0
What it does: It changes the sound of Mario's attack.

Attack FX C:
Where it is found: Starting from the stone cactus, go south for 3 times and west for two times. When you see the rock in the middle of the screen, jump when you're on it to reveal the Attack FX C badge.
How much BP it costs: 0
What it does: It changes the sound of Mario's attack.

Attack FX D:
Where it is found: After you complete Chapter 3, talk to Simon to get the Lyrics. Head to Dry-Dry Outpost and talk to the composer to receive the Melody. Bring the Melody bacvk to Simon to receive the Attack FX D badge.
How much BP it costs: 0
What it does: It changes the sound of Mario's attack.

Attack FX E:
Where it is found: In Shiver city, (in one of the houses), jump on the dresser, up the fireplace, onto the bookshelf and then go out of the window. Jump to the neighbouring house, open thw window, and then open the chest to receive this badge.
How much BP it costs: 0
What it does: It changes the sound of Mario's attack.

Bump Attack:
Where it is found: In one of Rip Cheato's deals, this is one of the prizes you win.
How much BP it costs: 5
What it does: When you meet a weaker enemy on the field, you can defeat it by walking into it.

Chill Out:
Where it is found: Buy from Merlow for 3 Star Pieces.
How much BP it costs: 2
What it does: It protects Mario from being hit by a First Strike.

Close Call:
Where it is found: On Goomba Road, hit the Red Block to obtain the Close Call badge.
How much BP it costs: 1
What it does: When Mario is in danger, enemies will sometimes miss you and "Lucky" will appear on the screen.

Damage Dodge:
Where it is found: 1) On Mt. Rugged, hidden in a secret stairway. 2) Buy from Rowf at the badge shop for 150 coins.
How much BP it costs: 3
What it does: If you succesfully use the action command, then Mario has 1 extra damage taken off off his already extra damage taken off.

Deep Focus:
Where it is found: 1) In the room which contains the mysterious chest. Princess Peach can insert all the badges and items she found into this chest. 2) In the Red Station in Shy Guy's Toy Box, have Watt search for this hidden badge inside the room right before you fight the Big Lantern Ghost. 3) After you have made the lava go away, fly on the bottom of the area in which you entered the lava room. Keep on flying to see a red ? block. Hit it to get the Deep Focus badge.
How much BP it costs: 1
What it does: When you focus in battle, it charges your Star Energy more than it usually would.

Defend Plus:
Where it found: In the Pink Station inside the Toy Box, open the chest that is in the room where you obtain the Frying Pan to receive this badge.
How much BP it costs: 6
What it does: All attacks that hit Mario will have 1 attack power taken off of them.

Dizzy Attack
Where it found: In Pleasent Path, it is located inside of a Red Block. You can't miss it.
How much BP it costs: 2
What it does: If you start the battle with a first strike, the enemy that you hit will be dizzy for 1 turn.

Dodge Master:
Where it found: Appears in Rowf's Badge Shop for 100 coins.
How much BP it costs: 2
What it does: It makes the action command work more often than usual.

Feeling Fine:
Where it is found: Buy from Merlow at Shooting Star Summit for 5 Star Pieces.
How much BP it costs: 3
What it does: It protects Mario from all dizziness and poisonous attacks in battle.

Fire Shield:
Where it is found: In Mt. Lavalava, jump off of the 2nd pulley you find near the middle of the rope. If you fall on the correct ledge then you can collect the Fire Shield badge.
How much BP it costs: 2
What it does: All attacks caused by fire enemies will be reduced by 1. You can also jump on fire enemies.

First Attack:
Where it found: Appears in Rowf's Badge Shop for 100 coins.
How much BP it costs: 1
What it does: You can destroy any enemy on the map that is weaker than you with a First Strike.

Flower Finder:
Where it is found: Buy from Merlow for 12 Star Pieces.
How much BP it costs: 3
What it does: After you finish the battle, more flowers will appear than they usually do.

Flower Saver:
Where it is found: 1) Buy from Merlow for 25 Star Pieces. 2) If you throw a blue berry into the well by Petunia, then you will receive this badge after it is thrown out.
How much BP it costs: 6
What it does: All of your special attack's FP cost are now reduced by 1 FP.

FP Plus:
Where it found: 1) After receiving Bombette, use her to explode the cracked wall outside of the Fortress. Go down the pipe and open the chest to receive the FP Plus badge. 2) From the end of the forest by the Boo's Mansion sign, face towards it. Head right until you see another passage. Enter it and circle the area to find the FP Plus badge 3) Appears in Rowf's Badge Shop for 150 coins.
How much BP it costs: 3
What it does: It increases your FP by 5.

Group Focus:
Where it found: Appears in Rowf's Badge Shop for 100 coins.
How much BP it costs: 2
What it does: Lets you party member have the ability to focus when it's their turn.

Happy Flower:
Where it is found: 1) Buy from Merlow for 8 Star Pieces. 2) In Flower Fields once you solve the 3 trees puzzle then you obtain this badge.
How much BP it costs: 8
What it does: It restores FP little by little in a battle.

Happy Heart:
Where it is found: 1) Buy from Merlow for 8 Star Pieces. 2) Go all the way to the top when you are walking on Rapheal's Tree. Hint, this has to be done when you are outside.
How much BP it costs: 3
What it does: It restores HP little by little in a battle.

Heart Finder:
Where it is found: Buy from Merlow for 12 Star Pieces.
How much BP it costs: 3
What it does: After you finish the battle, more hearts will appear than they usually do.

HP Drain:
Where it is found: Buy from Merlow for 15 Star Pieces.
How much BP it costs: 3
What it does: It decreases Mario's attack power by 1, but it restores 1 HP every turn.

HP Plus:
Where it found: 1) After receiving Kooper, head back to his house. When you see a badge on a stump, jump on the log and use his shell ability to receive the HP Plus badge. 2) In the Forbidden Forest, go to the lighting up mushrooms area. Enter the area that is the opposite way of the way you're supposed to enter. If you see a bee hive, circle the area until you find a red ? block. Jump at it to receive the HP Plus badge. 3) Appears in Rowf's Badge Shop for 150 coins.
How much BP it costs: 3
What it does: It increases your HP by 5.

I Spy:
Where it found: After you give Rowf his Calculator then he will give you this badge.
How much BP it costs: 1
What it does: Whenever a hidden panel is inside the room you are curently in, a Star Piece will flash, alerting you that there is a hidden panel around.

Ice Power:
Where it found: It's near the Frying Pan inside the Pink Station. It's inside of a chest.
How much BP it costs: 2
What it does: When attacking Fire Enemies, it will do 2 more damage to them. It also allows you to jump on them without being hurt.

Last Stand:
Where it is found: In the room closest to the right on the first floor of Peach's Castle.
How much BP it costs: 1
What it does: When Mario is in Danger, any attacks that hit him will do half the damage they would normally do.

Lucky Day:
Where it is found: After you complete the huge chain of letters than you receive this badge from Goompapa.
How much BP it costs: 7
What it does: Enemies fail to attack you even more than they would with Pretty Lucky.

Mega Rush:
Where it found: In Tubba Blubba's Castle, remember a clock? If you push that clock to the side then you will reveal a secret room. Open the dresser door and then hop your way up to the shelf. Inside the room which is by the shelf there is the Mega Rush badge sitting there.
How much BP it costs: 1
What it does: When Mario is in Peril, his attack power goes up by 4.

Money Money:
Where it is found: Buy from Merlow for 20 Star Pieces.
How much BP it costs: 7
What it does: When you receive coins from an enemy, they will be doubled.

Pay Off:
Where it is found: Buy from Merlow for 1 Star Piece.
How much BP it costs: 2
What it does: The more damage you take in battle, the more coins you receive.

P-Down, D-Up:
Where it is found: In the Crystal Palace, it is found in one the secret corridors.
How much BP it costs: 2
What it does: Your attack power is decreased by 1 and your defense power is increased by 1.

P-Up, D-Down:
Where it is found: In the Crystal Palace, it is found in one the secret corridors.
How much BP it costs: 2
What it does: Your attack power is increased by 1 and your defense power is decreased by 1.

Peekaboo:
Where it is found: Buy from Merlow for 10 Star Pieces.
How much BP it costs: 3
What it does: It shows the enemies health in battle without Tattling once.

Power Plus:
Where it is found: 1) Buy from Merlow for 25 Star Pieces. 2) After you defeat Anti Guy in the Toy Box, open up the chest he was guarding to find this badge.
How much BP it costs: 6
What it does: Mario's Jump and Hammer attacks go up by 1 attack power.

Power Rush:
Where it is found: In Princess Peach's castle, it is found inside of the library.
How much BP it costs: 1
What it does: When Mario is in Danger, his attack power goes up by 2.

Pretty Lucky:
Where it is found: Buy from Merlow for 5 Star Pieces.
How much BP it costs: 3
What it does: Enemies sometimes fail to attack Mario, whether he's in Danger or not.

Quick Change:
Where it found: After receiving the Super Boots, Merlon will tell you about a dream he had. Go to Dry-Dry Outpost and run around the tree for a while. A guy will now tell you that he had a dream about a Spinning House. If you go back there and Spin Jump 3 times inside Merlon's house, the Quick Change badge will fall down from his roof.
How much BP it costs: 4
What it does: If you ever change your party member's turn then you'll still get to act after you changed their turn.

Refund:
Where it found: After receiving Bombette, go back to the cracked wall and explode it with Bombette's abiltiy. Go outside and open the chest to receive the Rufund badge. It is near the ? Block that sent you down into the Bob-omb prison.
How much BP it costs: 1
What it does: If you use an item in battlem, you receive a bit of ocins in return.

Runaway Pay:
Where it found: In the Dry-Dry Desert, go to the trees that are shaped in a triangle form. Jump in the middle of them to receive the Runaway Pay badge.
How much BP it costs: 2
What it does: If you run away from an enemy that still gives you Star Points in battle, then you will still receive Star Points.

Slow Go:
Where it found: In Dry-Dry Ruins, near the Super Hammer chest, go atop the highest ledge above it. Go to the top of the ledge and use Parakarry's carry ability. You shoud land on the ledge that was just below it. Walk to the bottom side of the ledge and then turn left. You should go into a secret corridor which inside the chest has the Slow Go badge.
How much BP it costs: 0
What it does: It makes Mario walk at a slow pace which also makes him unable to run.

Speedy Spin:
Where it found: Appears in Rowf's Badge Shop for 50 coins.
How much BP it costs: 1
What it does: It makes Mario's Spin Ability on the map last longer.

Spike Sheild:
Where it found: In the third coffin that the third Mummy Pokey appears out of in the second room which is inside Dry-Dry Ruins.
How much BP it costs: 2
What it does: Mario can now jump on Spiked enemies.

Spin Attack:
Where it found: Starting at the Stone Cactus, go south 2 times and east once. When you find Blue Cacti, enter the Whirlwind. The whirlwind will throw you right beside the Spin Attack badge.
How much BP it costs: 3
What it does: You can destroy any enemy on the map that is weaker than you with a Spin Attack. Spin into them to be rid of them.

Zap Tap:
Where it found: Buy this badge from Merlow at the Shooting Star Summit for 10 Star Pieces.
How much BP it costs: 4
What it does: Mario is always electrified, meaning most enemies will take damage from him when they touch him.