I've heard horror stories about PayPal, but I've been using them for quite a few years, and never had a problem.  I can't imagine an easier service to use.

With that said, I do keep my bank accounts out of my PayPal profile, unless I need to be "verified" for some reason.  And at that time, I'll add a bank account, then remove it ASAP afterward.  I've been meaning to establish a special bank account just for PayPal, and have only a couple hundred bucks in there, but so far it has been one of those things I never get around to.

I recently tried YowCow.com, and hated it.  First of all, to sell stuff, you need to create a special type of account, where try treat you like a full "vendor", which is ridiculous.  (I occasionally sell a hard drive or something similar; I don't think that makes me a "hardware vendor".)  Then, one day while Googling for my name (something I do occasionally to ferret out privacy leaks), I found my name and other private information posted on one of YowCow's pages.  I complained to them, and the page soon disappeared.  I closed my YowCow account after that.