Did you win the auction on ebay? If that is the case then use paypal unless he stated in the auction he does not take it. As a seller you need to take into account that you will lose money due to eBay and paypal fees. Now if he discounts the price of the machine since you are reducing his fees then it might be worth it, otherwise just use paypal without a gift since you will be protected.

I would not pay using the "gift" option unless this is someone you know and trust. You will be left with zero protection. It is also against Ebay rules to request a gift payment to avoid fees on commercial sales.

Paypal fees are a cost of doing business as a seller and their responsibility.

I would not use the gift for an ebay/Paypal transaction. He may be voilating the ebay rules by asking you to send a "gift".

Absolutely not unless you know the person and are very comfortable with them. I would state to the seller that I just wasn't comfortable with that and want to keep it in Ebays guidelines for both of your protection.

Yup, ditto. He should have known about the fees with you going into the sale, and he should be okay with them. Unless he is offering to discount the game for you by about 3%, then you could balance the risk... but otherwise, I wouldn't.

Select auction payment, not gift. If he sent that to you in writing keep it, might need it if he gets nasty. Fees are his responsibility, not yours.