I still don't think Paypal payments have instant settlement. I don't use Paypal at all but i guess that most transactions are completed using credit card from / to the Paypal accounts of those involved with the transaction? Furthermore i guess that the funds then still have to be transferred from the receivers Paypal account into their nominated bank account. I would imagine that this still takes several days however the transaction is 'insured' as part of Paypal's security service and also the card issuer's protection policy.
Like i said though, i don't use Paypal so i could be off the mark here.