I will assume you are not a business seller, and you have not specified that you accept returns. See here:
http://pages.ebay.co.uk/help/sell/item- ... ribed.htmlFunnily enough buying from an individual gives you very little legal rights, but that's not how eBay sees it. No matter what happens, he can leave negative feedback if he wants to, so bear that in mind.
You need to find out if the damage was caused in transit (if he has damaged it deliberately it's effectively the same thing). If so, tell him you would be happy to submit a claim for damage to Royal Mail if he returns the items to you via recorded delivery (at his cost). You will then give him a refund. You should be able to re-sell the item so you won't be out financially. He probably won't want to do this as he will be out the cost of postage with nothing to show for it, but you are not obliged to do anything different.
If the damage was always there and you think it is properly described (e.g. the photo shows the damage), you can point him to the relevant evidence and give him the brush off. If you want to avoid the hassle you could still agree to the refund (as above), and you will be able to get the final value fee back.
If there was damage, you didn't mention it and it isn't clear in the photo, he can either return it for a refund (as above, at his cost) or you'll have to agree on a partial refund. Even if you think it's "common" damage, you should mention it.
Be careful, courteous, and follow the procedures to the letter. Review PayPal's policy too, because you will get no help from them if he does a chargeback unless your sending procedures are watertight.