There is a better way!
An application by the name of 'Market Enabler' is the answer. This application is designed to let people from countries that don't have the ability to purchase apps do so - it effectively makes your device think it's in the US, giving you access to the US market. By installing this, switching region, installing PayPal, switching region back and then uninstalling Market Enabler (if you desire), you end up with the PayPal app on your device and in your 'My Downloads' (as shown in this screenshot).
The downside? You need a rooted device... which means for the moment this will only work for G1 owners and not Magic owners...
Market Enabler can be downloaded here: http://tinyurl.com/marketenabler