For reasons known only to Varien the last 2 versions of Magento have contained serious Paypal bugs which can either create inaccurate accounting errors (seen only by the admin not the customer) or defaults to Order Complete instead of Processing Order.

The following will fix these errors

1) Upgrade to 1.3.2.4

2) Make the following changes to Standard.php

located at “app/code/core/Mage/Paypal/Model/Standard.php”
note that this is a core file.. future upgrades will over write this file.. hopefully this will be fixed in a future upgrade.

147     public function canCapture()
148     {
149         return true;
150     }

…..  ………

417     $invoice->register()->pay();
418              Mage::getModel('core/resource_transaction')
419            ->addObject($invoice)
420         ->addObject($invoice->getOrder())
421          ->save();
422        $order->setState(
423        Mage_Sales_Model_Order::STATE_PROCESSING, $newOrderStatus,
424           Mage::helper('paypal')->__('Invoice #%s created', $invoice->getIncrementId()),
425           $notified = true
Obviously if you are a Dx3webs customer these changes will already have been applied.

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