Wired's How-To Wiki has an interesting article about avoiding being cheated by a fake listing on Craigslist and eBay, some of the Internet's leading person-to-person commerce sites.
The title may make you think it's largely about Craigslist, but it seems like the majority of tips are for eBay. For the most part, they're good ones: if you follow their advice, you won't fall hook, line, and sinker for anything.
With regard to Craigslist, the tips are pretty simple: make deals in person and in cash, as money orders, checks, and wire transfers are exponentially likely to be fraudulent. There may be some disagreement about their eBay tips, though: click through to see what we think!
The article suggests that you should avoid purchasing from eBay sellers who have a positive rating of less than 100 unique transactions. As an experienced eBay user, it's my opinion that it's perfectly OK to buy from someone with fewer than 100 positive ratings, as long as they have a high positive feedback percentage and no negatives as a seller. Everyone has to start somewhere: the vast majority of people I've dealt with on eBay are completely honest.
Looking at positive buying feedback for someone who hasn't sold much? (The feedback shows whether the person in question was the buyer or seller on that particular auction.) Look at the purchased items themselves: worthless items (a digital photo file, for example) are often sold for a dollar or two, so that people can "buy" positive feedback and set themselves up as scam artists. Someone who's bought ten things that vary in price and type, and cost more than a few dollars each, is probably going to be fine to deal with; in comparison, someone with 30 purchases of $1 items may be sketchy.
The rest of the article's eBay tips are solid: consider whether a seller is selling something way too low, check that they're known to actually ship the merchandise they sell, and check for illegal "shill bidding," where they use a second name to drive up bid prices, or ask a friend to do so.
If you keep your wits about you, you'll be fine.