Well the terms of your agreement with PayPal are a confidential between you and them, but if I could I would bet that they prevent you from taking customer payment details and entering them as if you are a customer.
How would they know? Well if someone used a stolen card or chargeback fraud on you they would find out and you would have no protection, and would lose your merchant account - how would you accept payments then?
I wouldn't worry about it too much MrVibrating - I have only done it once or twice in the last 6 months and anyway, I am not about to face financial ruin for the price of a couple of balls of knitting wool.
I have no idea what the T&C's of my account are. I spent an hour looking for them on the Paypal website last night and found nothing about it at all. And I seem to have a Virtual Terminal Merchant's tool which I don't understand as I don't pay the monthly fee.
evaangel2 - Don't take a listen to me. Get yours set up properly and then you won't have any worries about having your account taken away (although there are plenty of other providers to replace it with).