Auctions that give bidders the chance to use a
credit card often go for higher prices (ie. more
bidding, higher limits) than those that only 
accept money order and/or check...

Passing the seller fees on to the bidder IS
illegal... it's also a pretty lousy practice in
my mind.  I understand why someone accepting a
$1000 payment through Paypal wouldn't want to
pay the 2.5percent fee, who would?  However, 
maybe the bidder would've only gone HALF that
high if he/she could've only paid with check or
money order...

If you can't absorb the fees, don't use the 
service.  

However, a thought to sellers about to ditch
Paypal because bidders are becoming more aware
that passing the fee on to them is illegal (and
starting to refuse to pay it):

Often I ONLY bid when I see the Paypal logo.
It's easy, it's fast, it saves me a trip to the
post office or bank.  If it costs me an extra 
$2 or $3 in bidding a bit higher, fine.  At 
least I can pay for the auction within 30 seconds
of winning and not have to worry about it the
next day.

If a seller ever, EVER tries to pass on a credit
card fee to me... well, forget my bid.  I won't
pay a fee that's not supposed to be mine to pay
(not to mention ILLEGAL).  This is no different
than if I went to the mall and a store there tried
to charge me an extra 3percent because I wanted
to use a credit card... I'd walk out.