Paypal only covers up to $1000 and there are restrictions:
https://www.paypal.com/cgi-bin/websc...cy_pbp-outside
I've never spent much over $500 or so but I always make sure I pay with a credit card, even when using paypal, so that I have the CC companies protection as well.
I would also consider using an escrow service for amounts that high, see the following topic at ebay:
http://pages.ebay.com/help/confidenc...nt-escrow.html