I've bought 8 or 9 bikes (at least) via eBay, plus various parts and schwag, and I've had only one unpleasant transaction. The scammers and rip-off artists are out there, but you shouldn't let that dissuade you.
I'd say to take sensible precautions, especially those where you have doubts that the seller actually has the item, e.g. where a catalog photo is used or seller can't/won't provide additional info. I always verify that the stated shipping cost includes any packaging or "handling" fees. Check the seller's feedback; while most buyers will leave positive feedback simply to avoid getting negative feedback from the seller, you can usually get a sense for what the transaction will be like from other people's reported experiences. I steer clear of any sellers who go ballistic when a buyer leaves what appears to be reasonable complaints. Unlike some of the other posters, I refuse to have anything further to do with PayPal. I use USPS money orders, and have never had a problem, either on eBay or the RBR classifieds.
Oh, and if you really want the item, be prepared to snipe as the deadline gets close....