YES , It's actually encouraged. You can also use it as a debit card in Super Markets,USPS,etc. Make sure you have your pin # for the debit of course.
-BB
Yeah...what BIG BEAR said. When I had money in my Paypal account, I had a Paypal Mastercard and used it. It's the exact same thing as a bank debit card. Any amount in your account is deducted when it's used. Note that the amount in your Paypal is the only source for it: it can't be linked to any credit cards in your Paypal account as far as I know.