Good question. Here's a good answer: Tax consequences of selling on eBay
http://www.alwayson-network.com/comments.php?id=P3741_0_6_0_C
From another article. Kinda gets to the jist of the first...
"The IRS can apply a list of nine indicators that might prove whether someone’s online auctions amount to a business. These indicators include evidence that the taxpayer depends on the income, acts in a businesslike manner, or puts enough time and effort into the activity to suggest a profit motive.
Fooden said the difference between a hobby and a business can often be the seller’s intent.
If someone is selling the junk that is collecting dust in a garage or basement, then that person probably is getting less than he paid for it. No profit here.
If someone is buying goods in bulk from a wholesaler and hoping to make a couple extra bucks reselling each one, then that person could have just started a profitable business, Fooden said.
Some categories are not so clear.
If a great-aunt’s collection of antique china fetched top dollar from collectors, that might mean capital gains taxes are owed. If someone scours neighborhood garage sales for great deals on comic books to resell on eBay, that might amount to running a business."