Second Update
Moral of the story:
Open a Dispute within 45 days. Even if you "think" there might be a problem. Don't wait until you're absolutely sure there's a problem.

When the questionnaire arises concerning the dispute do NOT say "you received something significantly different" even if you did. I say this because PayPal interprets this as still receiving the item you paid for, even though you didn't. Receiving something significantly different ISN'T receiving the item, but PayPal thinks it is. Look at the image below to see their policy.

I should have selected I didn't receive the item. I don't know why they have two options conflicting with each other: "Did not receive the item?" and "Received something significantly different than the item?" Oh well, check both boxes.

Update
Follow Up From PayPal
PayPal informed me that buyer protection lasts only 45 days. We didn't get our fake product from the Chinese thief until about 30 or more days after we won the auction though.

PayPal wouldn't even have followed up with me if I hadn't filled out a very lengthy feedback forum. I know this because they replied to my feedback with what appeared to be a generic reply stating their 45 day dispute policy.

I sent them a message back asking why it seems seller feedback (which can be left for up to 60 days) seems more important than buyer protection which is only valid for 45 days. They haven't replied and I doubt that they will.

I let them know I feel worse about my PayPal Buyer Protection experience than I feel about getting ripped off by the Chinese thief.

Ok, so I was only ripped off one other time that I remember on eBay and it was years before they had Buyer Protection offered. I let them know I'm not an expert at being ripped off and sorry I had a little trouble my first time.

Apparently PayPal thinks $9.99 (which is all my product was worth) is worth making a happy customer a very unhappy customer.

I'll still continue to buy and sell on eBay, I just wont have as much faith in PayPal Buyer Protection, something that eased my eBay purchasing insecurities since it had come out.

Original Post:
PayPal often boasts insured items on eBay.com. "Buyer Protection with PayPal."

I buy from eBay on a regular basis, at least a very loyal basis. I like eBay for selling stuff and buying stuff.

Recently on eBay, as when I first started on eBay, I was ripped off. Of course when I first started, eBay let people rip people off as if it was going out of style. Now that I thought ripping people off on eBay was out of style, I got ripped off.

The person had mostly good feedback from quite a few people, but apparently they did a mass ripoff and discontinued their user account.

Here's what PayPal had to say about someone who obviously rips people off and deactivates their account.

Image File (Appx. 50kb)