Take a look at these anti-PayPal sites. My general impression from all of this is that PayPal favors the word of the buyer over any seller and will put a hold on the seller's account based on anything a buyer says. I suggest that sellers who use PayPal keep very little funds in their PayPal account and that they link their PayPal account to a small commercial bank account that has no links to anything else. I also would not use PayPal for any large transactions.

Read and weep:
http://www.paypalsucks.com/
http://www.paypalsucks.com/links.shtml
http://www.ygoodman.com/paypal.asp

Robert