Also, was wondering what you think of Eusebius assessment- of Papias being 'a man of small mental capacity'.
And wondering if you think Papias was a hearer of the apostle John or the mysterious John the Elder.
Here's my response:
Richard Bauckham has some good material on Papias' credibility and Eusebius' assessment of him in Jesus And The Eyewitnesses (Grand Rapids, Michigan: Eerdmans, 2006). I disagree with Bauckham on some points, but his material is mostly helpful.
Judging from his terminology and practices, Papias seems to have been familiar with and to have employed some of the standards of ancient historiography. He was literate, of course, and was entrusted with the office of bishop. Qualifications like those place him well above the average person in antiquity. His work was of enough quality to motivate people to preserve it for more than a thousand years, despite the widespread opposition to his eschatology that persisted during most of that timeframe. (If you read the fragments at Tom Schmidt's web site, Papias was frequently criticized for his premillennialism, even in contexts in which that criticism could easily have been avoided. And he didn't just advocate premillennialism. He claimed that it was apostolic and reported alleged apostolic traditions to support it.) He recorded some dubious traditions, such as his material about the events surrounding Judas' death. But there's similar material in Josephus, Tacitus, and other ancient sources who are trusted on most issues.
Like all of us and like other ancient sources, Papias would have known more about some subjects than others. We have to make case-by-case judgments about how good of a position he was in to know the truth on a particular matter and how credible his claims seem to be. If we have reason to distrust something he reports about the death of Judas, it doesn't follow that we have comparable reason to distrust what he reported about the origins of Mark's gospel, for example. The Judas material has internal problems that the Mark material doesn't have, he names a highly credible source for his Mark material while not doing so for his Judas account, what he reports about Mark is corroborated by other sources whereas his Judas material isn't, the Mark account is about more recent events, the material he was reporting about Mark was of a more public nature, etc. To dismiss his Mark material by citing the unreliability of the Judas material, which people often do, is simplistic. Many of the same people who take that approach toward Papias don't treat other sources, like Josephus, the same way.
Eusebius does refer to Papias as "of very limited understanding" (Church History, 3:39). But he made that comment in the context of criticizing Papias' premillennialism, which Eusebius despised. In other contexts, even later in the same section of his church history, he cites Papias as if he's a reliable source.
Regarding his relationship with John, I've written on that subject at length in previous threads. See, for example, here and here. Of all the extant sources who comment on Papias' relationship with John, Irenaeus is the earliest and the one in the best position to judge the matter. He affirms that Papias was a disciple of the apostle. The large majority of the later sources who comment on the subject agree, and they do so at a time when Papias' writings were extant and other early documents not extant today were still available. Eusebius tells us why he doubts that relationship between Papias and John, and his reasons for doubting it are weak. It's unlikely that the elder John, as distinguished from the apostle, even existed. See here and here. The elder Papias refers to most likely was the apostle John. Either way, he was a source even earlier and more prominent than Papias.