Ok, first a few words about copyright, right to publicity and privacy rights. . .
There are two jurisdictions at play here: state law, and federal law. And there is statutory law and common law. State and fed laws are similar but not exactly the same. A copyright suit or a fraud action would probably be under fed jurisdiction and the Ebay agreement breach of contract would probably be a Calif. state law action (that depends on a lot of things).
1. Copyright attaches as soon as a "work" is put into tangable form. "Tangable" includes computer graphics. Federal copyright protection also attaches at the same time. It is not necessary to register the work or mark it with that little 'c'. However, although you can sue for copyright infringement without registering the work, you are limited to recovery of "actual" damages (ex: loss of business). If you register before the infringement then you are not limited to actual damages.
Most states have similar laws. California has what's called "right to publicity" which protects celebraties from the unauthorized use of their likeness, etc.
There are also various laws covering the right to privacy.
Although what this duffus is doing is wrong, suing him for copyright infringement or "right of publicity" probably wouldn't do you any good. Under the copyright laws, I think any of us would have a hard time showing any actual damages and I doubt that anyone registered their photos. It is also questionable whether the photos would qualify as a "work" under the federal statutes. Under California's "right to publicity" the photos aren't likenesses, etc., of any of us and I doubt that anyone of us qualifies as a celebrity. A whole bunch of stuff comes into play too: are the photos "work", was their use incidental, are the photos in the public domain, etc., etc., etc.
As for privacy, I think you gave that up when you posted the photos on the WWW.
That leaves the EBay agreement and basic fraud. I think this guy is violating the agreement, but Ebay doesn't have a very efficient way to deal with that. Fraud is probably the best bet. He seems to be implying that the cars in the photos use his product, so he can induce people to buy his product. If so, this is fraud.
Report him to the FBI Internet Fraud division (internet fraud is a federal crime, thus it's the FBI's deal). It would be a stronger case if someone who bought one of these things contacted the FBI.
If you start an email campaign or Ebay comment campaign against this guy be careful. You could find yourself on the wrong end of a lawsuit.
Oh ya, there is also the web site that originally posted the photos. They may have some rights here too, depending on their notices, etc., but they don't seem interested.
CYA part: These are my opinions only and not meant as legal advise.