How does Ebay work?

Don't ask me, it's been written to death.  First, go to Ebay and read the tutorial - don't just read that one, spend some time there.  

Then, go to Paypal and read the tutorial

Then, buy a few things on Ebay to see how it works. 

Basic tips

Don't use your e-mail for your Ebay name, unless you want to get all the Spam in the world

Do follow through on all your bids, or don't expect much success selling anything

How do I win auctions without wasting time?

1. Decide what you want to pay.  Be honest with yourself, really decide. 
2. Wait until 15 seconds before the auction ends.  That way, you won't alert the other bidders that you're interested
3. If the price is above your amount, go to bed and try another day.  If it's not, bid that amount.

Note - if the price is above what you said in step one, and you still want to bid, then you were lying.  Stop lying.

How do I get high prices for my stuff?

As to selling, do a lot of browsing and a little buying first, so that you
can have a feedback score that shows you're not a chump.  Then, my
simple method is as follows:

1. Take good pictures, digital
2. Pack the item, weigh it, and go to UPS.com or USPS.com and figure out
   the shipping (I usually estimate to Seattle) - If it's a delicate item, take
   a picture to show that it's well packed.
3. Search the sold items to find one like yours that went for a high price.
4. Steal all the ad copy from that one
5. If none went for a high price, don't get your hopes up
6. Tweak the ad so it's true - never lie.
7. List the thing so the auction closes around 8 PM Central
8. No reserve, and start it low.  People will bid on the low one and ignore
   the others after they bid - they get married to the "bargain" and stop looking. 
9. Ship as soon as the buyer pays
10. Repeat

The key to finding realistic pricing is to search completed items - there's a box on the left side of the screen.What stuff is listing for doesn't matter, since most of the bidding goes on in the last 5 minutes of the auction anyhow.

I wouldn't start an auction at what the thing's worth - most things listed that way just don't move, and you pay a higher insertion fee. Use reserves if you want. I only use them when the item in question is obscure and not routinely traded. For commodity items (computer parts, bicycles) I start as low as I can stand, and more bidders get into it.

If you've never sold anything before, I wouldn't start with a high-dollar item, since people judge the seller's past performance in deciding how much to bid.