Well when I met the guy (who came along with his friend) the two seemed really friendly and allowed me to throughly inspect his phone. Unfortunately looks can be deceiving. I was rather pissed when I found out those few weeks later, that the phone was reported lost/stolen. Their ad didn't have any photos, other than "good" condition, seeing it in person wasn't what I expected so he had his friend show his (who apparently was also selling it). That one was in mint condition and was the one I purchased from them.
They can always claim it as lost/stolen if they had insurance on it. This would in essence give them a free or heavily discounted iPhone. I don't think I'd ever buy from Craigslist again because of this, because as a buyer, you simply don't know, and they can always lie to cover it up, and/or use a temporary Google Voice number to prevent you from calling them later on. I think paying an extra $100-200 buying new is worth the security knowing that you are the first person with that phone, and you won't have to worry about these IMEI blocking issues.
As a suggestion (no guarantees of course), I would always look for the box, the box usually has some phone info that they could use to report their phone (unless they really went through the hassle to copy it down...). Check their phone number if they let you inspect their phone (and they should), and call it if you want (you probably had to call them anyway so you can verify this). Ensure its unlocked, don't just bring 1 carrier's sim card, always bring 2 to ensure its unlocked (at least if they do decide to report it you can still sell it overseas). Make sure its not on contract, some people here suggested doing it in a carrier store, I've never known of anyone doing it but it might be an option, but this may be hard to find out. Ask them if they have any other phones to sell, if they do, thats a yellow flag. If the ad doesn't have pictures of the phone, don't bother.
In the end I had to sell the iPhone on eBay with a bad IMEI number. So not every iPhone on eBay you hear about in these forums comes from someone who stole it, rather it could very well be someone who was ripped off and had no other options. I would suggest buying used from eBay, Amazon, or any known retailer, as they usually have buyer protections and more detailed descriptions to prevent or discourage these things. I usually sell my old iPhones that I bought myself on eBay so I can fund my new ones, but I would never do such a thing. So check feedbacks too.
I wish you luck, as I'm sure there are still honest people out there.
On other note, I've read that people who stole iPhones with blocked IMEI's but still had their phones under warranty were able to trade it for a new one from an Apple Store, this may be an option if this happened, and I had considered doing this because it was still under warranty, but I believed it was incredibly risky in that they could believe that I stole it, and quite dishonest to do so.
