eBay does a much better job of making people think they are protected than they do of actually protecting anyone.
Think about it.... What can eBay do?
Send nasty emails! OUCH! That really hurts!
Suspend your eBay account! Oh rats, it will take me most of 10 minutes to get another eBay account up and running!
It's like Rush Limbaugh says; 'Follow the money'. Since eBay doesn't have the money, they don't have any leverage to help you! Your protection comes from the people who have (or had) the money, and that needs to be Paypal.
But even Paypal won't protect you from an out-and-out fraud because the money is gone by the time you discover you've been ripped off.
So, what to do!?
#1 - Always pay with Paypal.
#2 - ALWAYS use a credit card.
For all but out-and-out fraud, Paypal will be all you need. But when Paypal tells you SORRY because the money is already gone, then you need your ace in the hole! Your Credit Card Company.
Is this foolproof? No, noting in life is foolproof. But if you do get hung out, this approach will give you several layers of protection and most likely, you'll get your money back.