I sold a LCD monitor (for $500) at the popular online auction
site,EBay.The Buyer paid through Paypal Echeck which was in a pending
mode.I decided to go ahead and ship the item.Later the Echeck bounced
and when I tried contacting the buyer for Payment,I did not get any
response.

I have the buyer's name ,address and phone number.

My question is,what legal avenues do I have to make this Buyer pay.I
shipped the item through Fedex and have proof that the item was indeed
delivered to this person.
I have already contacted the auciton site and they told me to pursue
the case with my local law enforcement agency and contact them if I
need any documentation relating to the sale.

I am considering filing a lawsuit at Small business claims court.Does
my case hold any water.

I'd be willing to bet that you don't really have the person's name and
address who received the stolen property.  Identify theft and
receiving goods purchased online without paying have become quite
common crimes. Good luck though

(1) This is first and foremost a criminal, not a civil, case. I hope
you've already contacted the police. This is (almost) the same as
stealing a monitor.

(2) Yes, you've got a case. Purchasing an item through eBay is
agreement in a contract.

(3) As Researcher-Help said, there are many cases of identity theft.
However, given the fact that the buyer received it at an address, it
is quite possible that you actually have the actual address.

I have the ACTUAL address and name.This person is still a member of
EBay and has a good +ve feedback.
I have spoken to him also intially(through the Cell # listed at eBay's
site).He told me that he would send the payment through money order
but that never happeded.
He now refuses to answer the phone or EMails.

Trust me,it's not the case of a identity threft.Ebay confirmed this
for me but they are not willing to help  me beyond the scope of
providing the information of the case to the invesigating authority.

So, as I asid, you certainly have got a case :-) 

Would you like me to post it as an official answer, or do you need any
further information.

Further clarification to your response will be appreciated.Here are my concerns:

1)Where should I report the crime.At my Township's Police station or
His. Or is there a special Police department which deal with the
Internet related cases.

2)Is EBay's proof of puchase and Fedex's Proof of delivery sufficient
enough documents to make the case.

3)Should I pursue it at my local Small Business claims court also.

4)Is there any other agency(like BBB etc) where I can present my case.

Thanks for your help.

You definitely have a case and need to report it. There are three
places that you MUST report this crime.

1. File a report with your local law enforcement. Pay a visit to a
local police station to accomplish this.
2. File a report with the Police Departnment local to the buyer
3. File a report on the Internet Crime Complaint Center by visiting
http://www.ic3.gov/

"The Internet Crime Complaint Center (IC3) is a partnership between
the Federal Bureau of Investigation (FBI) and the National White
Collar Crime Center (NW3C)."

This is a serious problem that exists on eBay and leads to my most
imporntant reccomendation. NEVER SHIP UNTIL YOU HAVE PAYMENT IN HAND.
I even go as far as saying that you should hold PayPal payments for 5
or 6 days (although this is not the best customer service) to make
sure there are no Administrative Holds placed against funds used by a
Buyer.

I hope this helps. I really encourage you to follow these steps as
this is critical in helping to stop crime.