I have also bought two bikes on ebay. One was in Southern California (I lived within an hour of the seller) and one was in New Mexico. For the California one, I drove to pick up the bike and pay the seller. I got to test ride the bike and also not pay shipping. The New Mexico bike was the same -- we did a road trip and it was really great! The New Mexico seller was in a Mariachi band that played at a local restaurant/club (local in NM) so the evening after the bike pick-up, we went to his restaurant and got serenaded!

I'd say a LOT of people are honest. I look for things like other items the seller is selling, sellers history (ie is it good? What else did they sell? Is there a theme?), and communication. I have seen people who are almost fencing items -- they take things and sell them for other people. I am often distrustful of them. For their other items, is it like they are selling personal use items that they no longer use or is it a business or is it a scam?

In both my bike purchases, they were personal use items that were no longer being used. The Bianchi had been a racing bike and the Cinelli had been sitting in this guy's garage.

With proper research, I'm sure you can find a great bike. I'd say though that it's a bonus if the bike is located near you so you can see it if you'd like.