protect you login data
do not use free mail for domain names (whois contact)
do not accept paypal from unknown buyers
Free email: I actually do use this (gMail) as my WhoIs contact mainly for the spam filtering but also it's an account I have access to 99% of the time.
BUT - I also have the registrars set up (I mainly use GD and Moniker). I have a separate email address - one I've never published based on a domain that I do not use just for registrar to client (me) contact. With GD, I have this second email address set as the contact but then when I register / transfer domains I change the email address to my gMail.
With Moniker it's almost the same thing.
As for PP with unknown buyers - I agree unless it isn't worth it (a $25 sale). Use an Escrow service (Escrow.com, Escrowdns.com, Sedo, etc..) and offer to at least "split" the fees or just jack up the price by the fee amount and make that your price.