Michael Barrett, of PayPal responded to unauthorized payments to iTunes new; "We've looked into this extensively, and want to assure you that: "PayPal system itself hasn't been compromised and continues to be secure," "if you've been affected by this issue, the criminals behind it haven't taken over or logged into your PayPal account", said Barrett."
Apple has also confirmed that iTunes' servers haven't been compromised. Those who've seen unauthorized iTunes charges to PayPal or credit card account, Apple has recommended that you contact your financial institution about a chargeback and change your iTunes password right away. They've some useful tips on protecting your iTunes account security.
Also, if you've had any fraudulent charges to your PayPal account, please call PayPal customer service – we'll help you get the charges reimbursed.