I keep my primary Paypal account linked to a seconday bank account that usually has a fairly low balance, so no major damage can be done. I seldom use Paypal for much anymore though, if I start using it a lot again, I'll open a new account at one of the banks we use and only use it for Paypal. I can transfer funds in and out electronically if I want, but Paypal can only access the one account.
In the past when I've done this, I only kept enough money in that bank account to fufill the Paypal payment I needed to make, and as soon as money hit my Paypal account, I'd transfer it to my bank, and then out of that bank account. Call me paranoid, but I've never had any of my bank accounts, credit cards, debit cards, or paypal accounts hit in the 10+ years I've been buying and selling stuff on the internet.
