I also agree - its down to trust.
Ive had several people, both on and off of this forum, who have paid me via PayPal Gift. Everything goes through as per normal and I send the item off to them.
However, I also like to treat my buyers as I would like to be treated myself. Im open with my contact details etc, as I have nothing to hide. If they dont get the item I'll chase with Royal Mail for compensation and issue the buyer a refund or replacement. If there is an issue with the item, I will resolve the issue my requesting the item back (if possible) and issuing a full refund or replacement, whether the initial payment was a gift or not. To me, its still a purchase no matter how the item is paid for.
This is why Im also open with my contact details - I know I'll resolve any possible issues to the buyers satisfaction. To be honest, when I sell items Im always 100% honest with the description anyway, so rarely have any complaints in the first instance!
You do need to be very careful when purchasing from someone you do not know though. If its via eBay, ALWAYS keep the transaction through eBay. NEVER complete a transaction outside of eBay - even if offered a discount.
If its a sale outside of eBay, and you are not sure about the seller, get some background info, or just say you are not comfortable with paying as a Gift as it leaves you no protection, just in case. In most cases, the seller will still proceed as they still get a sale, and gain some trust for future business.