I have had a lot of customer confusion when I offered both PayPal and a real-time shopping cart with a payment gateway on an e-commerce site. I have also heard a lot of problems caused by PayPal. I still offer it on my site, but I will probably discontinue it from lack of use.
PayPal offers the ability for visitors to use credit cards on your site, even if you don't have a merchant account. However, if at all possible, I recommend that the client set up a merchant account and accept credit cards directly. The reasons are less problems and many visitors don't have PayPal and it's just another obstacle.
For those that don't want to pay for real-time processing of credit cards, there are some free alternatives. One is Mal's E-commerce. I have used it and have had clients use it without any trouble. It is transparent to the visitor. If you want to see it in action, visit my site here:
http://www.drtandem.com/Web-Site-Critique.htm Click on Order at the bottom of the page and use the ficticious credit card number: 4111 1111 1111 1111 and an expiration date of anything beyond the current month and year. This will allow you to see it all the way through the process as a visitor would.
Mal's sends an e-mail to the website or whomever you designate to let them know that an order has been received. You log into your secure account at Mal's and retrieve the visitor's information. You would then process their credit card purchase as you would on a virtual terminal or by phone. It's not as easy as a real-time purchase for you, but it's the same for the visitor. Don't forget, it's free. You can also upgrade to a real-time account for a small monthly fee.
Free carts are great for a small client that doesn't want to invest a lot of money. Plus, you don't have to spend a lot of time setting up a gateway.