I've bought from them once and they seemed very professional. Unless you are selling used gear for gain (then please write a book about how to do that so we all can!), you shouldn't worry about 1099s from Paypal. They are reporting revenue, not income, and I am assuming you aren't actually making profit from these sales relative to your acquisition price.
The Music Room
With all the talk about PayPal and the IRS, I'm considering other ways to sell my unused gear. I've been thinking about The Music Room. I have the system I want and have no need for trade ins. Has anyone else sold items to The Music Room? How was your experience? Did they give you a decent price for your gear (I understand they need to make a profit too). I just don't want any complications come tax season next year...