Is there a market where I can buy apps with PayPal?
Will the original Market going to support payment with PayPal?
YAAM (Yet Another Android Market) uses PayPal, I've had no problems with it.
With the recent legal bickering between eBay and Google, I'd say that the Android Market starting to accept PayPal (owned by eBay) is highly unlikely any time soon:
There are other alternative markets like SlideMe that I believe do offer PayPal.
Neither Google Android Market nor the Amazon Appstore support Paypal.
SlideMe.org is an alternative market which does support Paypal payments. It's not a mirror, so you won't find as many apps as you would in the official Google Market.
There is no official support for Paypal in the android market, and seeing how Google and Paypal now seem to be competing a bit, I doubt there ever will be. But, if you want to use Paypal, you may be able to sign up for the Paypal Debit card and link that to your Google Checkout account. Then you will be using Paypal to make your purchases, and you can earn %1 cash back on the purchase.
If you really need to do this, you could get a debit card hooked to your paypal account. Both their straight debit card, and their prepaid debit card are master-card branded, so you can use them as your Google app store payment option.
It's not the app store taking Paypal, of course, but it gets you what you want without the players involved having to come to any agreements.
You can buy a gift card and use it yourself. I have used paypal to buy gift card from www.pcgamesupply.com and redeem it on google play.
What can you do if you are located in a country that still does not support paid apps? Please include solutions for non-rooted users as well.
Steps for purchasing
What about roaming charges? As a rule pre-paid SIMs do not work in other countries, so the only way to browse the market and download applications is connecting over Wi-Fi.
Why is a SIM required? Market detects Your location by SIM cards home country. By using a SIM from supported country You are effectively faking Your location.
Isn't it required for Google Checkout account or credit card used to be in supported country? It seems that not. For me these were both located in Estonia and everything went without problems.
What if application is using some weird copy protection that locks it to a specific SIM card? Would the app not stop working when real SIM is swapped in? To prevent this kind of copy protection on locking to the incorrect SIM the easiest option is to cancel the download after purchase has been complete. Swap the real SIM in and complete the download. If there is some kind of SIM check, it can be only done after installation has been complete.
Where can I get a pre-paid SIM card? Check eBay :) There is no actual credit required on the SIM, so these should be pretty cheap.
--credit: the poster himself (JaanusSiim)
For rooted phones:
There is an app called Market Enabler that allows you to fake which country and carrier you're on when you're browsing the market so that you can easily browse markets from other countries or carriers. using this you should be able to connect to other European markets (I don't know which country you're in but many European markets such as UK do allow paid apps, you don't have to go to the US for them).
I think you'd need to have a credit card that has a billing address in the US (or other supported country).
In Europe apps can be bought by users in Austria, France, Germany, Italy, Netherlands, Spain, the UK, and Switzerland.
Hopefully the number of supported countries will be increased when Google announces its apparently imminent Market improvements. The recent change to the terms and conditions to allow for carrier billing and rumours of Paypal support suggest that there will be new payment options in the near future, potentially for countries where Google Checkout is not currently available.
If you can't use the official market you could use AndAppStore, SlideME or one of the other third party app stores. The app selection and user base is considerably reduced however.