I have used paypal before on Fleabay and with other internet merchants. However this time I am purchasing some components from a distant Craigslist seller. Can someone describe the usual process of transaction? Just want to take the steps to protect myslef form scam. Thanks.

I also would like someone to answer him

Not sure of the exact steps, but when you go to pay the seller, there will be a funding options or something like that on the Paypal screen. If you want to use a credit card, click there and change the funding to that. That would probably give you the most protection, particularly if you use American Express.

On another forum (XDA developers) I was scammed when trying to purchase a cell phone from the marketplace. PayPal provided protection. In this case it was easy to deal with because the 'seller' never provided a tracking number and didn't respond to PayPal, so PayPal simply refunded my money. Just make sure you don't do gift option. I wonder too if you can request the seller to send you an invoice via PayPal with a list/description of the parts and pay per that invoice.

You're both pay pal members, right?
Give seller your PP ID email
Have seller send you an invoice for total amount.
Invoice will show up in your PP account and you should receive an email in your email account attached to PP.
Pay PP invoice to seller.

If it sounds like a scam, it is. Run away.
Otherwise, if the seller has good feedback and the deal doesn't sound too sketchy, then using Paypal should be pretty safe (and self-explanatory).

Main thing is to do the purchase as a purchase of goods, not a gift or personal payment. Paypal gives you buyer protection only if the payment is for goods or services, not for gifts or personal payments. Sellers usually want the payment as a gift or personal payment as that saves them fees but it leaves you unprotected. Also make sure the comment/description field in the payment list what you are paying for.

what is "Kenkyuuin"? researcher?

The other person sends you an invoice or request payment.
Now you have an offer to sell. Be sure to identify what you are buying.

You send payment. Acceptance of the offer, for the payment (consideration).

PayPal should give you buyer protection.
I just bought a stem on CL, 50 miles away, gave $10 for him to ship.
Not sure if he did or not, never got it, opened a dispute and a claim.
He never tracked, so he'll either refund or be done with PayPal.
My guess is he didn't send it, or packed it so haphazard it's gone.

Make sure you use a credit card with paypal, if you send cash (bank account) and there's a dispute and paypal say's you loose, yer out of luck, but if you paid by credit card and paypal tries to screw you, call the credit card company, let them know the situation and if yer not lying, they will reimburse you immediately and get their money back from paypal with no problem, the credit card company trumps paypal.

Definitely don't use the gift option, paypal won't dispute gifts
The people working disputes at paypal are morons, the people working disputes at your credit card are card sharks