I don't know a lot about varagesale (nor ever used it) but it is a legitimate thing. In a general google search it says it's a virtual garage sale site and is based on your location (created by a mom). It has millions of users and you can log in from Facebook so they must be okay with it. Because it is location based I think it is maybe like kijiji or marketplace.
While I don't believe it is at all connected to eBay, my guess would be since eBay has made all the changes so it is easier for our stuff to appear in search engines from google or anywhere that someone was searching for an item you had and it brought them to your listings here. Hasn't happened to me (yet?) but I have my listings off for the bulk of the summer while I'm away. Will be interesting to hear if anyone else has seen heard about this, thanks for mentioning it here!