First, let me say that shopping on ebay can lead to frustration, even if you don't get ripped off. Some sellers mis-represent the item's quality, or do a lousy job of packing it, or just wait a couple weeks before they get around to mailing it. Fortunately, they really are the minority.
I've made nearly a hundred purchases on ebay and was only once a victim of actual fraud. The seller had outstanding feedback (including recent sales) so I bid for a season 2 set of B5 dvd's. Sure enough, the day after I mailed the money order, negative feedback began to appear. I did all the things a buyer should to be careful, and it still happened.
This is a risk of doing business on ebay. If you're not willing to take the chance, don't bid. That said, there are things you can do to limit your risk:
1) As others have said, check the seller's feedback. Look to see if it's recent. Look for suspicious patterns - dormant accounts have been hacked and used by crooks to defraud buyers. Those accounts will usually show no activity for months, then suddenly lots for sale.
2) Start small, with relatively inexpensive items. Gaming items are generally a good deal and the worst problem I've ever had was a guy who took almost a month to get it in the mail to me.
3) If you're worried, avoid electronics, collectibles, and other high-dollar items. Crooks are more likely to post items with a large appeal (the aforementioned B5 dvd's, for example

). How many are really going to post an old copy of Gamma World, when they could post a mint season of ST:TNG dvd's or a laptop computer?
4) Many sellers on ebay are actual stores that also use ebay on the side. I've had great experiences with these stores, including diverzions.com and ShockingPrice.com, among others.
As always, YMMV. Everyone's experience will be slightly different. Just realize that if you buy often enough, eventually the law of averages will catch up with you. I'm willing to accept the risk, as I've saved far more over time on my good transactions than I lost on the one bad one. (My only irritation is knowing the %#!*^%*# got away with it...

) Oh well...