A lot of sellers seem to like adding a section in their small print which says, in some way or other, that they are not responsible for the item or items purchased being lost in the post. Putting it simply, this is NOT TRUE, and regardless of whether a seller's terms state this or not, the seller IS responsible. The only time a seller ceases to be responsible for the item being lost or damaged in transit is when that item has been received by the buyer.
Why? Well the reason is simple. A buyer could purchase an item from an unscrupulous seller, who then pockets the money and tells the buyer the item has been sent. A week later, having not received anything, the buyer sends the seller a message asking where the item is. The seller says "lost in post" and voila, washes their hands of the "lost item", since they are not responsible for that. Utter rubbish.
For sellers sending items, it is easy to ensure items are not lost, or if they are, a claim can be made. Simply sending the item by a fully trackable means (EG. Royal Mail Special Delivery, or DHL (these are the two methods i use)) and you can then prove if an item is lost and then begin an insurance claim against the service used to get the money back for the item they lost. Likewise, it can also be used to prove to possible unscrupulous buyers that an item has not only been sent, but has also been delivered and signed for (required if Paypal claims are made, Paypal will not honour their seller protection plan unless a fully trackable dispatch method is used).
The bottom line, for all concerned, is that sellers ARE responsible for their items right up to the moment the buyer has it in their hands. Whether they like it or not...
*EDIT - April 7th 2010*
Just to clarify "fully trackable", particularly when overseas deliveries are involved. Fully trackable does exactly what it says on the tin, you can locate your parcel anywhere in the world and once signed for, a notification will be displayed on the web page of the postal service used. Royal Mail Recorded Delivery or International Signed For services are NOT fully trackable. The signatures are not always taken and in the case of International Signed For, are not provided on the web site. Also, with International Signed For, the tracking system stops once it is with the delivery service of the country it has been sent to. Since this is not fully trackable and does not provide online proof of delivery, Paypal will refuse to honour their seller protection scheme, as they have recently done with me which has allowed them to rip me off of nearly £200. If you are a seller and are sending overseas, the only Royal Mail service that is fully trackable and provides online proof of delivery is Airsure. Do NOT use International Signed For, it's worthless. Airsure is only available to countries that have the necessary logistical services required to allow tracking within their country and you'd be surprised at how few there are, so if your buyer is not located in a country where Airsure is available, make them pay for a courier service such as DHL, UPS, FedEx etc.