Just to clarify I see this on the board so much, it is not against paypals terms of service or rules to sell digital currency or "intangible items" they just have a gray area for protection with it.
They've said it explicitly once. Search for "Clearcoin". They guy had a successful business, managed to protect himself from most frauds, but still got shut down by Paypal. He was a verified user and all. The reason was because Paypal did not authorize bitcoin exchange.
I don't get it, he should of just said "intangible goods" then, thats how I've always referred to all of my bitcoin, mmorpg gold, all of that when talking on the phone with paypal themselves. And i've been going over 3 years now with it.