Sell from home? I would only give email or cell as contact info. Then arrange a place to meet for the sale/test ride (see below on that). There's no sense in announcing to the world "I'm looking to get rid of a bike at the following address."
A friend who wants to buy? I'd say sod off, unless they want to just walk up and hand you the friend's cash. Try to come up with a good reason why you wouldn't handle it yourself if you wanted to buy a bike... that's what I thought.
Test ride? This has been discussed many times. I'd demand cash in hand before the ride. That way they get the ride (which is a reasonable desire, of course; you're just protecting yourself from the sleazebags), and you have total security. Make it clear, in writing or in front of witnesses, that if they so much as scratch it, they've bought it. Finally, go with your gut; make it clear in the discussions of any test rides that you reserve the right to call it off for whatever reason you see fit.
Payment? Cash.
Backup? Yes, good idea. The level of apparent psychosis is negotiable, but it never hurts to have another person there on your side in case they notice something you don't. They can also back you up if you end up in situation where it would otherwise be your word against theirs.
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