Not everybody has a credit card or bank account, or access to either of those things.
As for verifying your account, the simplest way would be to call a local bank branch and open up an account there. It is completely free, and once you have an account set up you can verify your account and avoid all the hassle. This is usually only a problem if you are really young, or if for criminal/financial reasons you are restricted from having bank accounts. Even in that case, there are many "online" banking branches that you can open accounts with for free, completely over the internet or by phone. ING Direct is one that I used to have a Savings account with, and I'm sure you could verify your PayPal with that?
The only other thing I could think of is make another PayPal account? I just recently I created a Canadian PayPal account and used my real age (I am 21, which is well over the legal age here), and I have a limit of something like $3000-5000 that I can send before I have to verify my account. Within 5 minutes of creating my account, I was sending and receiving money no problem.
I have no idea what the rules/regulations and loopholes are concerning PayPal, but perhaps if you created a Canadian account and feigned your age to be over 19 years old, you would be able to send/receive some money right away? This would only be a short term solution though and shouldn't be used to deal with large amounts of money in case the account gets locked - as what you are doing is faking an identity, which is illegal. I'm not even sure if there is a difference between CA and US PayPal, but I haven't had to worry about verifying my account yet (because like you, I am unable to).