Is the <paper-toolbar> in the main document? Because #1 should not work unless the <paper-toolbar> is in the main document. But if it is, then it should find the <paper-toolbar>, because <paper-toolbar> isn't "a shadow DOM element", it's an element that hosts a shadow DOM (or shady DOM) tree. (In the docs, we use "local DOM" so we don't have to keep saying, "shadow DOM or shady DOM".)
If <paper-toolbar> itself is in the main document, you should be able to find it (but not elements inside its shadow DOM/shady DOM tree). For example, if you try to retrieve a div inside <paper-toolbar>.
var topBar = Polymer.dom(document).querySelector('#topBar');
You shouldn't get any results. Remove the Polymer.dom, and you do.
In summary:
#1 says, "Find a paper-toolbar in the main document, respecting (simulated) shadow DOM scoping."
#2 is effectively, "Find a paper-toolbar in the main document, ignoring (simulated) shadow DOM scoping."
So if you want to avoid picking up a deep shadow DOM child by accident, use #1. If it doesn't make a difference, as Eric said, you can use #2.
Arthur