If you send a PayPal payment as a gift you lose all buyer protections PayPal offers. You will be unable to file a claim/dispute if there are any problems with the transaction. If the item is broken, not as described, or never arrives, PayPal will be unable to help you if you sent payment as a gift. Do yourself a HUGE favor and work out a deal that includes PayPal fees. You should also only ship to the confirmed address listed in paypal. Otherwise you will lose the protection Paypal offers.

Remember, you can also use a Moderator as a 3rd party if you want complete peace of mind when buying/selling/trading.