I came to know of many people getting cheated by PayPal. And I must say I am also one of those people cheated by PayPal.
Thank god, I came to know about this at very early stage. I had USD 10 in my Account and I thought of buying a product that costs USD 8.5. I tried to pay using PayPal, but, I could not pay as I got a message that my account is in Limited Access and I can add funds, but, can’t pay from my account. To reactivate my account, they asked me to send the FAX copy of ID proof and Address Proof. I also sent them to their FAX number. Later, there is no communication on the receipt of the FAX Message and on the account status. Then I went to websearch on this and came to know that most of the internet business owners are cheated by PayPal this way.
So, my sincere advice is not to use PayPal as your Payment Gateway. Instead, go for Payment Gateways and/or Merchant Accounts given by scheduled banks or a very good trusted party like ccavenue.com (For Indian Rupee Transactions).