Here are a few details for when you use Paypal to print your postage and address labels.  Most of this information is gleaned from the instructions printed on the label sheet:

** Paypal will charge your Paypal account for the postage if there is enough money in the account; if there is not, Paypal charges either your bank acct or your credit card acct.
** The only fee other than the postage fee is a $0.18 charge for "Delivery Confirmation"  you cannot decline this fee/service.  The fee is probably split between Paypal, Pitney Bowes (provides the label technology), and USPS to pay for the service.
** You can choose to have the label show the Postage $$$ or have a barcode for the $$$
** You can use a self-adhesive label or plain paper – 8.5" x 11" and then tape/glue the label onto the package with the following guidelines:
*** DO NOT tape over the barcode (see Note #1 below)
 *** Technically, there are two bar codes – one for the postage and another one that may relate to the "Delivery Confirmation".  The instructions only mention one – I do not know which one they are referring to, but am checking and will reply with any info I receive.  
 *** Be sure all edges are secure (no unsecure flaps that could cause the label to tear off)
 *** Place the label so it does not wrap abound the edge of the package,  the entire label must be shown on one side of the package
 *** The size of the label is: 4 1/16" x 6 3/8", not including the text "The safe way to pay online Paypal"
 *** I assume they make the label this size so you won't try to use it on a "letter" sized envelope.
** The label will show on the top half of the sheet:
*** sender and recipient name/address
*** either a barcode for the postage or the $$$ of postage
*** The date, your zipcode and the weight of the package – all this next to the postage $$$ or barcode
*** what I assume is a barcode and printed numbers of the Delivery Confirmation
*** "Electronic Rate Approved" # - to prove it is legal
** A "Receipt" or online Label Record showing on the bottom half of the sheet:
 *** Print & Ship Date
 *** Postage – Type and Amount
 *** Any charges, such as the $0.18 (as of 11/07) Delivery Confirmation charge
 *** Addresses – From and To

Note #1 - I have see many packages where the entire label is "taped over", so apparently it makes no difference to the USPS.

This is a very nice system, although it is very difficult to learn the details until you actually use it.  I am seeking answers to a few more details and will report back when available.  I have removed a few details (for privacy) from the attached picture of the label.

Happy Shipping,

CarolinaCoffeeT