As mentioned above, Paypal is great for buyers, as it lets them use credit cards, opening up the chargeback (disputing charges) method if mdse isn't received. Note: Paypal's "Buyer Protection" (or whatever it's called) reads like complete bullshit (IMO), so chargeback appears to be the way to go.
As a seller, I find Paypal's vig a PITA, but it's worth eating because it allows buyers to use credit cards, thus enlarging the universe of buyers. Of course, I only sell CDs; sellers of big-ticket items may object more.