PayPal is reportedly in talks with Google to add PayPal as a payment method to Android Market. I guess they're hoping to make paying for apps as easy as possible so that Android users might start paying for apps.
Currently in Android Market, you can buy apps through Google Checkout or in some cases, carrier billing. Both options are pretty convenient but aren't especially popular (compared to iTunes or PayPal). Having PayPal as a payment option, Android Market would theoretically gain 87 million active accounts willing to spend their hard-earned greenbacks on apps. Which is a lot of theoretical customers! But consider that PayPal currently powers the woefully underpowered Blackberry App World and it's sorta clear that no matter how easy it is to buy apps, people still need good apps to buy. At the very least, good crappy apps. [Bloomberg]