I sold my Bike Friday to someone here on the TE forums. She was a new user and I was a little nervous, but we talked a couple times on the phone and I think we both felt comfortable enough to go forward with the transaction. We both admitted we were a bit nervous. I gave her my eBay user info so she could look up my buying and selling history.
She actually paid me first through Paypal, then I shipped the bike. It was a leap of faith for both of us (especially her since she paid me first). She lives in Canada, so we shipped it to a UPS store in NY and she picked it up there so she didn't have to pay customs fees.
It worked out well for me (and for her) so it can be done successfully. You just have to be careful.