The latest Paypal fraud being executed on the web takes the following format. An email is sent to you requesting username and password details. It is made in such a way as to make you suspicous after you open it. so yuo open it and a read confirmation is sent to the fraudsters. They then know your email address is a valid paypal id and then send you anothe unrelated email with a small attachment embedded in the body of the email. This attachment logs the next time you logon to paypal to make a payment or other transaction. The access details are now complete for the fraudster to transact business on your account. Trouble is that you will only become aware of this when you recive your credit card bill.
To prevent this from happening turn off your preview pane in outlook express and delete emails that you suspect. Paypal never looks for details by email ever.