Yes I have downloads set to true and have product attributes set properly. Live transaction-Everything works as expected, except that I have to change the order status from pending manually. So if I am not near a PC customers will be waiting for a product.
Maybe it's something specific to this version of PayPal? I can't believe that the osC developers would set up all the digital download stuff and then leave the store and customer hanging like that! I'll be looking into this myself within a month or two -- let's share here whatever we find out.
Still unsure about the tax thing as well(I am in NY)
What aspect of taxes -- legal or osC implementation? My understanding is that the customer billing address is what counts for NY state sales taxes -- billed just as if you were physically shipping to that address. I think osC is supposed to handle that properly (once it has the billing address). Of course, with dozens of different tax rates in the state, it's a royal PITA to figure out the correct rate!
I am to the point where I am ready to pay someone to get this done for me.
Well, if I get it figured out before you, and it's a non-tivial job to set you up... Maybe you should try again in the osC community forum -- even if the two developers are still in hibernation, the community seems to be fairly active. Just pick a board that deals with taxes and seems to be fairly active.