I know many people use PayPal, and it is a very convenient way to pay for auctions (and donate to Sawmill Creek), but I have closed my account after a particularly bad experience.
I received an email from PayPal, confirming two payments totalling US$1,596 for money transfers to Vietnam ! Sure enough, the transactions were real, and my credit card had been debited.
I lodged a claim with PayPal, and several days later I received an email telling me my account had been credited - no explanation, no apology, nothing. What's more they shorted me about $30 on the credits.
Whilst they handled the problem promptly, it just goes to show that their security had been breached, so I no longer felt safe about using them. I am also concerned by their "arms length" approach to problems, which is typical of eBay (their parent company). They just don't seem to want to hear from customers.