On the whole, I have had no problems with Paypal - I use it fairly regularly for buying and selling via eBay. The lower rating, however, relates to a transaction with Dealsniper.com, from whom I purchased a DS game. I was dubious, but when I saw the payment would be processed by Paypal, I felt a little better about the whole deal.
When the game arrived, it didn't work, and after much digging turned out to be a fake copy. When I put in a claim with Paypal, they said there was nothing they could do! So, why have such a system in place then?!