I have been using Paypal since probably about the time it started.....can't say I'm necessarily a fan, but it's like Ebay for some things: the simplicity is worth the "price". That said, I do a few things to make it palatable:
1. I have a separate 'ebay/paypal' bank account that's tied w/ paypal
2. I have a Paypal debit card so I very very rarely actually transfer funds back to that account...I usually just spend with the card (which gives something like 1% cash back, btw).

I have had friends who have had terrible Paypal problems....where Paypal has taken/siezed funds based on a buyer claim & in effect put someone's checking acct in a tailspin...and the customer service is probably on par with most cellular phone services. But, the ease factor - especially for printing shipping labels - is worth it to me for the fee/risk/etc.