you ever make a payment through paypal, then it automatically creates a paypal account for you since you have provided them with sufficient info by way of email address and cardholders details.

If you dont subsequently confirm the account (within 30 days I think) it will disappear and the poor guy that generated the original paypal request doesnt't get his $5 bonus either!

There is a better explanation within the paypal site. Log in, and look under merchant tools? You should see a link that says something like 'Receive payments from anyone with a valid email address, even if they dont have a paypal account'