Yep, use it all the time. Sometimes from places that I've never heard of. That is the great thing about credit cards. If you have an issue, dispute the charge and you're almost always out $0. Worst case you are out $50 (by law). People that are paraniod about using a cc online make no sense to me.
I dealing with a reputable company, like Amazon.com, I use a CC. If the company is unknown, then I use Paypal paid by a CC. I feel the extra security of Pay Pal in the middle is a good thing. The only thing I hate about Paypal is the spam and fisching e-mail, which is really not their fault.
Paypal sucks. They won't hardly try to help you at all.