Anyone who already has an e-bay account should have gotten this deal sent directly to their box anyway, and if not, the time it takes to set up your pay-pal account first will probably cause this this deal expire before it can be used. Why, because paypal takes its time in making those pesky verification deposits to activate the account.
No, it doesn't need to be BuyItNow, it can be any auction. When paying through PayPal, use the coupon code, and that amount will be credited back to your Paypal account (it takes a few days).
When I logged into my eBay account the coupon is shown on the home page, so this deal is not so great when it's right there when you log in. I also received an email alert for the coupon. One thing about eBay & PayPal coupons is that they will not work with your account unless they were issued to you. I've called PayPal about coupon codes I've found online & this is what they said.