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Webwork - 8:29 pm on Sep 12, 2005 (gmt 0)
When in doubt I use an escrow service, almost always Escrow.com. Payment is made into escrow before the domain is transferred. I've sent and I've received 5 figure payments without paperwork or escrow, depending on evidence of business reputation. Trust your instincts and resolve your doubts. A phone call often works wonders. The more evidence I have that the buyer has been in business for awhile and values their reputation the easier it is to do business. The dodgier the buyer or seller the more likely I'll simply walk away and never look back.
Most of the domains I've sold were sold without need for formal documents, contracts, etc. Maybe 1/20 ask for something in writing. I've never signed anything longer than 2 pages. 1 page does the trick for me. ;0)