I would only do it with people I know well, but be warned that if you use PayPal a lot like I do, they will contact you and threaten to suspend your account if you don't cease receiving and sending gift payments. I now just ask buyers to add 3% when sending me payment.
@batwolf - I haven't had that contact yet. I've probably sent/received over 3000 in the last year via gifting. I did however get an email that said they would be freezing any funds received via ebay for 21 days. Apparently a new policy or something...