Yowza, lots to sort through here....
I think 'hype' does still exist in the ebay and internet era. The words selected to fill out the Item Title are meant to draw attention to the item, and some word will draw more attention- i.e., generate more 'hype'- than other words. Example:
Marquis de Sade 7" heavy metal single
vs
Marquis de Sade Rare NWOBHM Private
The 2nd title will catch more people's eye as it contains more words that will pique someone's curiosity. 'Rare' means you may not see this very often- better stop and take a look! 'Nwobhm' is a popular genre and key search term for many browsers. 'Private' implies small pressing, few made, possible a hidden gem... all ideas that appeal to many collectors. "7" heavy metal single" does not imply anything special about the record; someone unfamiliar with MdS may not notice the item b/c the advertising didn't hype it very well.
Glockose has a good point though; with mp3s so ubiquitous, it's relatively easy to HEAR the music BEFORE you BUY the music. 10 years ago you didn't have this option. If someone dyped an album on a sale list as "rare KILLER 80s US power metal" it was MUCH harder to find out whether the description was accurate. Today the potential buyer has a lot more resources to help research the item bfore buying.
However, this 'buyer research' approach starts to fall apart when we wade into unknown waters like the unknown US metal singles underground. Very little info is available for many of these, and sound clips are hard to come by. I'm not a manic mp3 hunter, but I do poke around for things I'm interested to hear, and I have a decent list of US metal that I still haven't found sound files for. So with these items, we do revert back to oldschool hype; the running joke of "oo, it's a private US metal single, it's obviously an expensive collectible!"
Changing gears...
Price and Rarity is hard to sort out. You have rare records that are good, rare record that suck, common records that are good, and common records that suck. On top of those combinations, everyone's tastes differ; as someone mentioned earlier, there's NO album that everyone agrees on. Easy example- Doomedplanet said, and most would agree, that Leather Nunn is Great and Rare. However, I personaly don't think the music is anything special. It's not bad, but it's never clicked with me the way it does many people. Thus, my idea of it's value is different; i would not pay any serious amount of money for a copy b/c I'm not interested in adding it to my collection. Someone else is willing to pay $1000 for a copy (not all copies get that high, but some have). Still others might love to have it, but will not pay the going price for it, usually because they cannot afford to. So then you add financial standing to the equation as well
Three years ago I would not have paid $300 for ANY record to keep b/c I couldn't afford to. Today, I can afford to spend that much on an item I want.
Last note, for now at least:
I would add another option to Glockose's list:
-Wait for another copy to turn up!
This can be frustrating and requires patience, but it can pay off. We've all seen records that sell for $400 one day and $40 the next. This is especially true for items advertised as '1st time on ebay' or '1st time online in 10 years!'- that may be true, but it's also a form of hype meant to generate interest. If a copy didn't show up for the past 10 years, act now or you may have to wait another 10 years! People in general, and collectors especially, are not very patient and will respond to this type of hype. That copy may see the price run up b/c several people have never seen it before and they go nuts wanting to be the first to own it. But when the second copy turns up, it's not as big a deal. And when a third turns up, not such a big deal. Yes, you may have to wait a few extra years, but you may be able to get the item for hundreds of dollars less.
(Note other factors can come into play- who sees the auction, who's strapped for cash when it gets listed, who's on vacation and misses the auction... ebay involves a lot of random variables, its not an exact science).
I'm interested to see IF this scenario plays out in the US 7" market on ebay. Some singles have went for pretty high prices in recent months during their 'ebay debuts'. However, the second copy that's turned up has brought far less, at least in some cases. One single went from $219 to $56. One LP went from $450 to $158 to $78.
I don't expect this will work with EVERY item. Some of these US singles are gonna prove to be genuinely R-A-R-E such that few copies are ever offered up, and the price will stay high. Still, consider taking a pass on that 7" steel that's "never been seen on ebay before", especially if you're not comfortable with the way the bids are spiraling upwards and you're not sure what it sounds like or how many were pressed. It's up to the buyer to do his homework and know what he is buying before shelling out the cash for it.
Hope this added something to the conversation, sorry if I rambled. It's late and time to go home!
It's a classic 'family story' that pisses off grandma to this day. She comes across as the classic 'sweet little ol' lady', so it really gets her ticked off that we still tell the story about her scamming some poor little kid 
