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If you want to sell digital products online with practically no up-front costs besides a regular website, this approach will work:

Set up a password protected directory on your site. If you don't know how, check with your hosting service. Nearly all hosts allow this.
Give this directory a name made up of seemingly random numbers and letters, such as /b596798x22
Invent a username and password for this directory made of a jumble of letters and numbers also, such as username: 4339278x, password: t220792. Be aware that a numeral one (1) could be mistaken for a lower-case "L".
Upload your digital content and give it a meaningful name followed by 4 or 5 jumbled letters and numbers, such as highlights070x1.pdf or dreamtide99s4.mp3.
Use PayPal "Website Payments Standard to receive payments, with a "Buy Now" button for each product according to the instructions on the site.
When you receive an e-mail from PayPal indicating that payment has been made, immediately send the purchaser a pre-prepared e-mail containing the URL on your website, the username and password, and a request not to pass the information on.
The idea of the random letters and numbers is to (a) give an illusion of a unique, machine-generated URL and (b) to make it difficult to guess the filename of additional products you have in that directory.

I can hear you ranting, "You idiot! People will send your URL to all their friends. You'll be a victim of fraud." My response is this: Perhaps a few purchasers will do this, but if you ask them not to, it'll happen very rarely. Change your directory name occasionally. And if you get an unauthorized download here and there, what have they stolen? A few electrons. People who steal seldom make likely candidates to purchase your products anyway. Unless your product is wildly popular, you won't lose many sales due to fraud.

This approach isn't the best, of course. It won't work well for high volumes and doesn't provide instant downloads for your customers. But it will do to get you started -- and the price is right. I use it as a back-up to more secure approaches.

Professional Digital Download Systems

The best systems generate a unique download URL for each purchaser that times out in a few days or after a certain number of download attempts . These are some systems I like:

PayLoadz works with PayPal only and charges a flat monthly rate. It includes a moderate-size, built-in affiliate network and optional placement in the PayLoadz store. It is eBay compatible.
1ShoppingCart includes a newsletter program, autoresponder, ad tracker, affiliate program, digital download, and a shopping cart for a flat monthly rate. If you don't use PayPal as your system, you'll also need a payment gateway and merchant account to take credit cards.
ClickBank is very popular and includes a large, built-in affiliate network. It costs $49.95 set-up and 7.5% plus $1 transaction fee per sale. It includes a payment system.
ShopSite Pro is a full-featured small business shopping cart and catalog building program that I've used since 1997. It has a strong digital delivery feature, plus lots of flexibility for selling tangible products. Unless you use PayPal or Google Checkout, you'll need a payment gateway and a merchant account to take credit cards.
There are many other very good systems. Don't limit yourself to these mentioned above.

PayPal now has a micropayment system for transactions under $2 USD. Fees are 5% + 5¢ transaction fee. This makes it cost-effective to sell mp3 files of your music for 99¢ or provide access to low-cost documents for $2 — and still make money. Hooked together with PayLoadz for digital delivery, this could be a money-maker for certain kinds of businesses.