They are protected, sort of. PayPal has two levels of buyer protection, PayPal Buyer Protection and the Buyer Complaint Process. T&F has the link for Buyer Protection, but here's info about the Buyer Complaint Process:
http://www.paypal.com/cgi-bin/webscr?cmd=_protections-buyer-outsidesince the seller's auctions didn't have Buyer Protection, the buyers will have to go through the complaint process. This has a $25 fee and a maximum that can be awarded. It isn't perfect, but it may help some of the buyers if they don't receive their items.