True, and to my knowledge (and experience) Paypal are ALWAYS on the buyers side.
I recently sold a Bose iPod adapter, sent it to the buyer, he said it was faulty, I told him to send it back and I'll refund his postage providing that it was faulty. Got it back and it worked perfectly and I have a video to prove it. He left bad feedback, I lost out on the final valuation fee and listing which was £8 and eBay/Paypal didn't want to know, not much of a loss but that's not the point...