Check out this thread http://forums.digitalpoint.com/showthread.php?t=1990017 there are some options. It depends on what your selling and how many $ per month your selling. Any merchant account is better than PayPal But that doesn't mean it's the best option for you.
On site processing is better but if you must use a 3rd party gateway paypal is #1 in my humble opinion
Not really, my experiance of pay pal has always been very good even when I need to get my money back for any reason, its the most widely used. I think they are brilliant and would not want to use anything else to be honest.
You'll typically pay less in transaction fees with your own merchant account, but that could involve programming for API integration which you may or may not feel comfortable with. Also, we have found that a lot of people prefer using PayPal for online payments because they already have their payment information stored there.
Ive heard Paypal has actual Merchant account systems for store fronts....does anyone know if thats true?
There are many payment processors but i think Paypal is the most economical payment processor and definitely most widely used one.