n00b to internet commerce

So, there's this eBay purchase I'm considering making. So I need an eBay account. Done. But the seller prefers PayPal, which is also the preferred payment of choice for the internet at large, and so a step towards joining the community is having a PayPal account. Okay, done.

Now how does this all work? I'm assuming I give PayPal my credit card info. Then, when I make a purchase, I give them my PayPal info, PayPal bills my credit card, I pay my credit card bill as usual, and everything's good. Am I right? wrong? Totally wildly off the mark?

Also, as long as I'm asking questions - I'm going to a semi formal tomorrow. I have a ridonkulous blue dress with polka dots. Black heels or ruby slippers red flats?