I've rented from VRBO with no issues at all. In fact, I'd do it again in a heartbeat before paying +25-50% to rent through a holding company such as ResortQuest.
I'd definitely recommend Kaanapali Shores as a nice location. We rented via VRBO and our 2bdrm unit was fabulous. The bedroom had an awesome view of the ocean. The grounds were immaculate and struck the right balance of being not too small but not too big either. Here's where we stayed:
http://www.vrbo.com/53979
You won't get any closer to the ocean than Maui Kai. Some of the units listed on VRBO look very, very nice (granite countertops, etc) and the views are to kill for. The building was built right on the beach. (I'd love to own here, but the environmentalist in me wishes that the government would force them to tear it down, restore the beach, and move the building back 100 yards.) Here's one unit on VRBO I'd consider, though there are lots of others.
http://www.vrbo.com/47715
Note that the pool at Maui Kai is in the back, though. That's because there's no room in the front!
If you haven't already, check out WizardPub.com, which is the website of the highly recommended Maui Revealed books. You have to enter a code to see their reviews, but aerial views are gratis and very helpful.
http://www.wizardpub.com/maui/mrmauikai.html
http://www.wizardpub.com/maui/mrkaanapalishores.html