The escrow service is there to ensure that the transaction is completed.
You sell something to the buyer. He sends his bitcoins to the escrow service. You send the product to the buyer. Buyer verifies receipt of the item. Escrow service releases the item to you.
If there is a dispute the escrow service becomes a judge and decides who gets the bitcoins.
The next step in Bitcoin is to use multi-signature transactions so that the escrow service never actually holds the bitcoins but can determine who will receive them.
With multisig escrow you will not have the risk that the escrow agent will take your money and run although you would have new risks. You would still risk that the escrow and the other party you are working with being the same person (unknowing to you) and the result would be that your money would be lost.
You would also risk that you or someone else has difficulty signing a multisig transaction and/or does not handle the multisig private key properly which would result in that person not being able "agree" to release the funds to the appropriate party; if both the buyer and seller are "newbies" then there is a chance that this could apply to both parties.
