Is it free to make a PayPal account? And how does e-bay work??

I don't really understand how e-bay works. So, lets say i want to bid on an auction. I made a PayPal account, and i have a credit card. i click on 'Place a Bid' button, and than what happens? The money from my credit card is transfered to the buyers credit card/or bank account, and he sends me the object? And making a PayPal account is free? NOTE:i want only to buy things, NOT to sell.
Thanks to everyone who answer.

When you place a bid, you enter the maximum amount that you are willing to pay for the item. The amount that you pay if you win will be the smallest amount that is above the maximum bid of everyone else. So if you bid $200 on something, but the highest bid anyone else placed was $149, you'll only have to pay $150.

When you win an item, you have the option to pay for it. You don't HAVE to, but not paying will get you negative feedback and people will be hesitant to let you buy from them. If you choose PayPal as your payment option, you will be transfered to PayPal and send the payment through it to their PayPal account. Most sellers don't send the item until the money has made it into their account.

A PayPal account is absolutely free to the buyer. The seller has to pay a small fee for each transaction, but you only pay the price of the item plus shipping. PayPal will have to be linked to your bank account, so it can deposit and withdraw directly from it. However, you do need to have a backup credit card as well so that they can get money from you if there's none in your bank account.

you have it right. it's so money doesn't pass from person to person, it passes through a secure system like paypal (other sites use other secure systems - for when dealing with credit card details.). the other person has no access to your details only paypal do. as long as you have a credit card then yes paypal is free, I didn't pay extra to sign up for mine.

you place a bid, then it depends if you have the highest bid at the end of the auction (how long is left on the auction is listed), if you do then the seller or paypal will contact you via ebay to make sure your bid still stands. then paypal will take the money from your your bank account that the credit card is attached to and transfer it to the sellers account and then the seller posts the item on to you.