I'll third Namecheap. GoDaddy is extremely slow and it's more difficult to push a domain name to another user.
domainsite and dynadot examples: info domains $1,99, $2.99 respectively not so cheap: namecheadp and godaddy examples: info domains $3.48, $5.95 each
Everyone else said "NameCheap.com" , just for clarification. Most big registrars now take PayPal, registerfly namecheap domainsite godaddy all wwd resellers dotster etc. etc. etc. Decide based on service and prices, not based on payment methods accepted (Unless you live in BFN and have no other choice)
You can use paypal at godaddy, but only if you have a credit card registered. No problems at namecheap. Plus they are faster, easier to navigate, and best of all....none of that godaddy crap if ever you want to transfer the domain to another account.
My credit card is not registered at GoDaddy, but I'm using PayPal there. Having PayPal makes obvious that you have a credit or debit card, hence I don't see what for GoDaddy may need a registered cc As I said, mine is not And true, Netfirms does not accept PayPal but apart of the low price for domains alone, I'm in love with the deal I got from them: 2 domains + 20GB webspace for $10. Valid for the first year, but I you want to keep the domain you can renew, transfer and cancel the hosting in such case.
Avoid registerfly.com, I have a lot problems with them and I am not the only one check www.registerflies.com (registerflies.com is not my site). Also before you buy domains on any of the places recommended try to check their reputation as much as you can.