The primary issue with paypal is that people seem to expect them to act as some sort of legal mediator in stead of drawing up a real contract. Paypal has a claims process, but it is not meant to be the first and only way to fight scammers off.

And most of the time when people talk about paypal support burning them, they mean that the mediator did not see things their way. They expect paypal to act as some sort of court for free, without even being given all the facts.

The bottom line is that if you want to guarantee a project or item, get it in writing and only make paypal the payment gateway. If something comes up, take them to a court of law.