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One thing I like about using pay PayPal is that your money is protected. If you don't agree with the money tranfer, you get 45 days to settle it.
I've been using PayPal for a long time now, and never had any problem with it. I do use a unique password for it that I don't use anywhere else.
About those phishing mails, I also get them from my email provider (or rather, they say they are from my email provider). As soon as anybody asks for a password or confirmation of information, a lot of red lights, sirens, air alarms, and fire alarms should go off...
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