In the latest This Week in Tech, Leo Laporte talked about how he got ripped off on ebay. He bought a camera, paid with paypal, and never got the camera, but since paypal can only insure up to $200, and since he paid $2100, he was just out the $1900 with little recourse. Here's how to keep the same from happening to you:

When you set up a paypal account to send money, you have to authorize a bank account. Do that, but don't use that account. Add a credit card as an alternative payment option. If you have a check card that functions as a credit card, you avoid the interest but still get the same benefit. Use that credit card as the payment source when you go to pay. Now, paypal will try to convince you to use the bank account and will not allow the credit card to be the default payment method, but if you make sure it's coming through the card, the card company (Visa, MasterCard, etc.) automatically protects your purchase. If you get ripped off, just report the fraud using the toll-free number on the back of the card, and you should get all of your money back, and you didn't even have to pay for paypal's insurance.

It's really that simple. You simply have to remember to switch to credit card on the payment screen.