Xoom has announced that it will not accept PayPal as payment method.
Find below the blog post from Xoom.
After Wednesday, March 24, 2010, Xoom will not accept PayPal as a payment method for money transfers. Any PayPal-funded transactions that have been placed before that time will be processed as usual.
We sincerely apologize for any inconvenience this change in our service may cause our customers.
Customers will still be able to pay for Xoom money transfers after March 24 by using either a United States bank account, a debit card or a credit card. Using a United States bank account is an easy, secure and low cost way to send money with Xoom.