It is completely safe. They act as the middleman in your online transactions. That way you don't expose your credit/debit card details to unknown third party websites.
Sorry to interrupt but I have a question related to Paypal also
Guys I cannot cofirm my email address due to some reason ... what is the confirmation no. ? They havent given the activate button anywhere .... please can someone help ?
Assuming you lost your confirmation email, you can login to paypal and ask for re-activation email. If you cannot login to your email, it is advisable not to use paypal.