I know they're basically the same company in principle, as Paypal is owned by Ebay. However, you're just using Paypal as a means of payment. They protect your payment in the event the goods aren't delivered. Ebay are in charge of the whole accounts setup though, and they're the ones who take action against the sellers account for activity such as this.
I'd expect Paypal to refund your money, and not much else. I'd also expect Ebay to suspend his account for fraudulent activity, but you'll have to report him to Ebay, not Paypal.
Or am I being stupid....
I'd expect Paypal to refund your money, and not much else. I'd also expect Ebay to suspend his account for fraudulent activity, but you'll have to report him to Ebay, not Paypal.
Or am I being stupid....

There are some right twunts out there and most of them seem to use ebay as a way of ripping people off. Saying that, the incident I refer to is the ONLY issue I have ever had with buying or selling on ebay!