So how does domain selling work? If the guy pays my by paypal, do i just give him my domain password? Cause then he'd have all my info. How do i transfer a domain annonymously?
However, I've never actually tried this out (selling a domain to someone else) so I cannot confirm that your WHOIS information would be secure. All I know is that I've transferred several domains to different registrars (I didn't like the old one, whatever) and all that was needed for me to do (at the old registrar) was to approve the transfer, or do nothing and let the transfer go through, and it went through.
Registrars always tell you to keep your domains "locked" because if you don't, someone else could transfer the domain away from you and keep it for themselves. It's not quite so simple (as I said, I always get an email saying, "Do you *really* want this domain to be transferred?") but that's basically how it works.
You could probably also sell on eBay, using a Paypal email address that doesn't identify you. They might still reveal your name -- I'm not sure.