This is due to repeated cases where someone pays for Bitcoins with Paypal, receives their Bitcoins, and then fraudulently complains to Paypal that they never received their goods. Paypal too often sides with the fraudulent buyer in this case, and so exchangers no longer allow this method of funding.
quote: However, the major exchanges like Mt. Gox are registered to individuals outside the U.S. in many cases and, further, may not qualify as a "business" as they charge no fees and do not make money off advertising.
quote: Mt Gox charges a small fee (0.65%) for each trade.