Marci's right. Now, my address is confirmed, but I know people who don't want to confirm because they aren't comfortable giving the necessary information to Paypal. They're great Ebayers, but tend to be concerned about hacking and info leaks and such. I'm not sure what the answer is because even knowing them, I get a little worried when a buyer has an unconfirmed address, but so far I haven't had any problems.
Whether it's the address issue or something else, if I get a really hinky feeling about a certain transaction, I'll spend a little extra to require a signature for delivery. With USPS, the buyer can go to the PO when it's convenient for them and they know that they can't just claim not to have rec'd the item. Again, I haven't had an issue with it, but the peace of mind is worth it.
The only real problems I've had as a buyer or as a seller were with people who had good numbers and a very positive rating. It's sad that it happens at all, but out of something like 700 or 800 transactions, I'd say that only 3 were serious problems and 2 of those 3 were resolved somehow.