Watch out for everything.
Seriously though, a few key things:
1) Always check their feedback
2) be very reluctant to buy from someone with zero or minimal transactions.
3) be very reluctant to buy from someone with low feedback numbers. (go for 98 to 100% - if they've sold dozens of items, it's not unusual for there to be whiners in the bunch - but read the negative feedback)
4) be wary of buying an item (like a guitar) that doesn't have several good pictures AND good descriptions as to the condition.
5) be wary of buying an expensive item from someone who has a history of only a couple of cheap items - some scammers come on and buy/sell a couple of cheap items and then work the scam on a larger item. (i.e. what would someone who bought/sold a couple of dolls be doing with a pristine Jem? - not that it's totally impossible)
6) if they are close to your area, email them and see if you can go see the item before you buy.
7) you are better protected if you buy with paypal secured by a credit card.
If it's a foreign auction, remember that you will usually have to pay customs on an item as well, which most sellers don't tell you about - it could be a lot for an expensive item.
I've never tried to cancel a bid but I know there is a policy on e8ay you can read about it. I think it's up to the seller to allow you to cancel your bid, but be straight - you shouldn't bid unless you are sure you want an item.
