I don't have any personal experience selling such products but I will try to address your concerns to the best I can.
***If selling replica cell phones, how does the buyer activate them? For example, will Verizon activate a replica Black Berry Storm?
One thing you should check is that the phone's system is compatible or can be used in your country. Also that it is an 'open' phone and not locked to a certain network. I'm not quite sure if Verizon or other providers would activate it for you. Maybe you can try buying a pre-paid sim package or better yet call the service provider and ask them directly.
***Also, does ebay allow sellers to list replica items such as cell phones?
NO, eBay does not allow sellers to list replica cell phones or any product for that matter. Especially if they are bearing the original brand's logo and/or name. If you do this your listings will be removed and you could be in a lot of trouble.
You may want to read this before you decide to post anything on eBay:Link hidden: Login to view
Hope this helps. Cheers :)