I use Paypal because it's easy and all I need is a password to do online transactions
But, if I make a purchase through it, to an unknown site, or merchant, I ALWAYS use a credit card, especially so if the item isn't covered by Paypal's crappy seller/buyer policies.
That way at least, if Paypal refuse to intervene or help when there's a problem, you can reverse the transaction through your credit card company.
In some cases, people only accept paypal anyways, especially small merchants.