I thought PayPal charged a transaction fee as well as the percentage? At least they used to. On those $1 enhancements in the classifieds section I was being charged 33 cents by PayPal for each one. I wanted to charge less for them, but I'll be darned if I am going to use my site as a revenue generator mostly for PayPal!
BTW, this would be an excellent topic to talk about on my new
http://www.BoardOfInquiry.com site. I have a whole forum dedicated to Ebay and PayPal issues.