The basic escrow: The buyer commits a payment to escrow. The seller receives a transaction with the money in escrow, but he can't spend it until the buyer unlocks it... If the seller doesn't send the goods, he doesn't get paid. The buyer would still be out the money, but at least the seller has no monetary motivation to stiff him.

The buyer can't benefit by failing to pay. He can't get the escrow money back. He can't fail to pay due to lack of funds. The seller can see that the funds are committed to his key and can't be sent to anyone else...