> My big problem with all this is that Ebay
> could have, with their brand name weight,
> effectively taken almost all of the market
> right out from under paypal's nose.

They did, in 1998 E-Bay purchased "Billpoint" as their own pay system but it didn't work out as well as E-bay expected.

> Imagine this scenario: What if ebay had
> started their own branch to handle payments
> the way paypal does? An ebay shootoff like
> this wouldn't have the problem of people
> being afraid to register, because,
> "hey, it's ebay...". Everyone
> knows ebay.

Like I said, it didn't quite work out this way.

> They could have even have went so far as to
> refuse to allow seller's to use paypal to
> pay for auctions:) Or they could have went
> the more civil route and simply undercut
> paypal's rates (but what's the fun in that?)

I'm not sure about the rate comparison thing but had they refused to allow people to use PayPal for auctions they would have had a very large mess on their hands.