Personally it sucks that David did not get his watch but honestly, stuff happens and Tim was stand up enough to (or is) send the money back. Outside of some time and frustration, David is not out anything. Tim is out a watch without knowing what happened to it.
Personally I have been lucky with all of my online dealings and everyone has been stand up (here and other boards) on their deals. I try to do the exact thing too.
What does upset me is when you post up in an ad, are given a place in line (as you might not been the first person but asked to be put in line if the original buyer backs out) and when the buyer before you backs out, you're like "Great, I should be next in line" as the seller had said earlier. Then when that time comes, you get a message that "someone" else had sent a PM earlier then mine but the seller hadn't read it before mine.
Personally, there should be no back door PM deals, unless that person posted in the ad BEFORE sending a PM. This makes it fair to everyone. One board I am on does require this and I think it's a good practice. Okay, my venting is done (having lost an item I wanted due to this... not on ExPo BTW).
Hopefully David gets his money back (if he hasn't already).