B.,
I've never used a paci with either of my children, but if I was you I would put her on her tummy when she lays down...I know they say 'back is best' but both of my kids have slept on their tummies since day 1. It soothes them, and if she can raise her head a bit, it'll help her build more strength in her neck and back and she'll learn eventually that she has to put the paci back in her mouth. However, I think that the paci is hard to get rid of later on. My cousin used on with her daughter, who is now 6...and still walks around with it and if she looses it or you hide it, she freaks out. When she's this little, it's not going to hurt her feelings or anything, just yours.
I know what it's like to hear your child cry and it break your heart...but sometimes you have to let them cry themselves to sleep...it's hard...and sometimes you just need to step out on the porch or turn the music on. Give her 10-15 mns to cry back to sleep, if she hasn't by then go check on her, reassure her that you are there for her, love on her, DON'T PICK HER UP, pat her bottom till she falls back asleep, then slip out. I know that you're sleep deprived...BEEN THERE DONE THAT...I lived for 5 mnths with myself, my son and his father sleeping in the same room at my parents house after we moved to Fl from Va...and he used to sleep through the night before we moved, but when we were all together, he woke up about 8-10 times a night, at the least. I wanted to jump out the window or just get in the car and go to sleep!! But you can do this...you're gonna get through it, it's hard but you have to remember that you love her and you want what is best for her, so for a week or so, you might have to just grin and bear the crying, because of putting her in her own bed and not running to her every minute.