One of the fundamental parts of paypal is the ease in which a transaction can be reversed if the customer is not pleased. Bitcoin transactions are irreversable. Many websites that currently accept paypal may be cautious about this. So that means Paypal will have to take the heat if something goes wrong in a transaction. Something I don't see happening.
The fiat payments are usually not reversible either but it's paypal's system that is the weak link. Paypal doesn't actually take the money back out of your bank account they just minus the balance from your account and then you owe them the money so they essentially take the heat until you pay back. If they handled bitcoin payments it would probably work in a similar way. Either that or they will just hold the money as some sort of escrow until the transaction has been successfully completed.