Paypal Ruled in my favor now trying to collect $1,210 from me

[nonchalantnancy]

I had an auction on Ebay in Dec 2005. It consisted of 6 boxes of merchandise. Buyer raced to the buy it now price & bought it. Auction plainly said 6 boxes & buyer was told several times. I gave him the tracking & insurance numbers.
I never thought anything would ever happen to me, because I had 100% feedback on Ebay & had always been Extremely Honest with people. Wrong!
When the buyer received the first of the 6 boxes, he reversed his credit card charge saying he hadn't received everything.
He did receive all 6 boxes & personsally signed for them himself.
Paypal said "I" had to pay them. When I said I was going to the FTC & California atoorney General's Office, they told the buyer that he had to return the merchandise. He refused. DUH!
They then ruled in my favor & said the case was closed.
They later changed their mind again & said that his credit card company ruled in his favor, so I again owed them the money. They Refused to give me any information on his credit card company or even their name.
September 2006, collection agency NCO called me saying I owe Them the $1,210 because Paypal turned it over to them.
My question is, what's my best recourse now? Also, what is Paypal's Legal Company Name & Address?
Email address: snoozycat1@lycos.com