Oh, and I forgot to mention...
When PayPal freezes your account, you get a nice email telling you all about it, and giving you 7 or 10 days (I don't remember which, it's very short) to provide whatever paperwork they want. That might include bank statements, by the way.
Failure to comply by the deadline will result in your account being closed.
Have a nice day, and your custom is important to us...