Paypal is now owned by eBay and is very secure (there was a recent scam with e-mails puporting to be from Paypal asking people to confirm their credit card details but really!)It is the perfect way to pay instantly for your eBay purchases, the seller receives instant payment and can despatch your goods straight away. It's the only way to eBay.
I've used it twice with no problems, I guess its secure as any online payment method. I've bought several things over the net,pay my household bills regular over the net,use online banking and online credit card facilities and never had any problems