I have never had a problem with PayPal since the beginning. I visted that PayPal Sucks site and read many many stories.. I see on many of these stories involve lazy/cheap sellers who do not use some sort of Delivery Confirmation and are {bleep}ing that PayPal doesn't believe them when customers say they didn't get their package.
So one thing to keep in mind when shipping out anything people... use delivery confirmation.
I understand that there are other problems as well, but many of these people on that website are just sour cause they didnt want to spend the extra bucks for delivery confirmation..