The Nice PayPal Downloads extension utilizes PayPal's Website Payments Standard and Instant Payment Notification (IPN) services. We believe these services to be the most flexible for the majority of our customers.
As for setting up a PayPal Business account, it is pretty simple. If you already have a personal account you can simply upgrade to a business account. Otherwise, you will set up a business account straight away. They will ask some questions about you. PayPal will also want you to associate a bank account with your PayPal account. This is convenient for you because then you can transfer all of the money you will be making through your PayPal account, straight to your bank account.
To sign up for a PayPal Business account, simply go here PayPal Business Account
and get started.
~ All the best