When you sell an item, the scammer who brought your item will email you a scam email, This will be an 'Instant Payment Notification' from PayPal to notify you that they have paid. (PayPal always email you when someone has paid you an amount). Except, that this payment notification is fake, and the person hasnt really paid. Instead, they fake up an email that looks exactly like PayPal's. In this email, there will be a link for you to sign into your paypal account, this link unfortunatley does not go to a real PayPal page, but the scammer's identical PayPal login page. So you are filling in your paypal email and password into the scammers fake page, and voila! They have access to your account.
One of the easiest ways to check that this simple scam doesnt happen to you, Is when you recieve a payment notification from PayPal/Scammer, right mouse click any URL's that are in the email (preferably the one to log in to PayPal), Then click Properties, and then you can see the real url that the link will go to. Scammer emails will hide the real url you are pressing in the email, to make it seem it is a proper link to paypal, although they have hidden there scam site into the url instead, you can still find out where it really goes to.
Here is an example... the link apparantly goes to PayPal...
But right click, Properties...
And there is the real link shown...
It goes to msn.co.uk instead.
This is probably one of the simpliest, yet effective scams they use. This isnt the only one, but still it helps you protect your ebay/paypal accounts if you know a bit more about it.