I do not like them, the exclusive arrangement with eBay is collusion, kind of like every other thing in USA financial companies. If they spent as much time improving their service as they do trying to eliminate competition we would all be better served.
They are not a bank, nor are they covered under the usual government banking regulations - and that's a big part of the problem. If they were a bank, they would have to provide customers with much stricter controls over the money. They do use a bank in the background for clearing bank check and cc transactions (as only banks can do this).
With that thought in mind, they are not covered by FDIC (Federal Deposit Insurance) either - so although you can stash money in a paypal account, but it's not Federally protected (although given the state of the banks and the government, I'm not sure how much that's worth these days...).
I too dislike ebay's attempts to force paypal as the only payment option - I'm surprised visa and mastercard haven't taken them to court on this - I suspect they will...
In concept, paypal provides some useful capabilities, but the lack of customer service and these other failings make them a pain to deal with when things go wrong.
