Depends on where you are from, I do believe in the uk there is a paypal that can be used for poker sites but I know in canada we cannot. I know 888 recently switched on paypal i believe for desposits from some countries, and am sure others might have it as well where applicable for use via paypal.
I haven't looked at PayPal's non-US TOS, but funding online gaming/gambling is strictly forbidden by their US TOS and can result in having accounts and funds seized.
I deposited to Betfred (iPoker, UK) with Paypal no problem... I only withdrew to my card, however there was the option to withdraw with any method which you deposit with so I assume withdrawing to Paypal works as well. Will test it soon.