I've been a customer of Paypal both for business and personal for at least 10 years. I've never had an issue with transactions and the fees between transferring from Paypal to a local account have been $0. I once lodged a complaint regarding the non delivery of a gift card via email for my Nephew's birthday, which I paid using my Paypal account. It was through a large gaming company who never responded to either my personal complaints directly to them or to Paypal. I received a complete refund following the due process.
So, yes. I trust them But as penlady points out, be aware of hoax emails etc.
And like Iburmaster, I don't keep large amounts on Paypal, however I feel much safer making a transaction through paypal that will use either my savings or credit card details then I do putting in my CC details directly to a system run by an online retailer.