Maybe interested in a private sale on Armslist. What is the best way to handle the payment without getting screwed, etc.

USPS Money Order is the ONLY thing I would accept.

If you are the seller, USPS Money Order is the only way to go.

If you are the buyer than you are having to be more trusting. How far away is it? Can you drive there and pay in person and go with seller to FedEx and ship it to your FFL? Maybe someone you know lives near this guy?

Funny, not long ago I was told that USPS money orders were being faked and my local bank even wanted me to cash the thing at the post office and not at their bank.  

What I would suggest is this.  Ask the seller to take the pistol to his FFL for xfer to your FFL here in CT.  When he's there and confirms it's there, you then simply pay him via one of the payment sites.  I used PayPal last time.  It was easy.   The gun was at the FFL and I released the funds to him.  The FFL in NH then sent the pistol overnight to my guy here in CT and we were set.  

Now, there's no requirement for a gun to go FFL to FFL.  It is necessary for your purchase to be legally transferred to you by a local FFL as you know so the seller would have to send it to your FFL overnight after receiving a copy of the FFL's license and shipping to the address on the license.  You could still use Paypal but there would be no way to verify that he would ship after getting the bucks.  So, using a local FFL to ship to your FFL would resolve that.  Heck, you could even send the money to the FFL, too, but that would involve more fees, I think.

Rome