Has anyone used paypal on Chinese Taobao?
Hi, sorry for the late reply. I don't think using Paypal (as in the international Paypal) is possible. There happens to be a Chinese payment service called "Paypal", but it has no relation to the other one.
If you need to buy something online in China, I strongly suggest that you get someone local to help you set it up - you probably still need a bank account. Setting up accounts and payments in China is often really complex with a lot of links between banks, ID's, physical addresses, email addresses, and even mobile phone verification. Having someone help you will make sure your hair doesn't turn gray 
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