1) i think we made that change to account for a problem with residential versus business addresses you where having, but i'm not a hundred percent certain.
2) as long as the address is passing the Country to the shipping provider, it should automatically return the international rate if it is an international address.
3) If the billing country being used is one paypal does not support, the transaction will fail.
4) If the Shipping country is one that the shipping provider does not support, the shipping lookup will fail. if you have the shipping failure set to go to another page, it will go to the shipping failure page.
5) if the shipping goes over the weight limit, and you have a failure redirect set, it will go to the failure page, otherwise it will return 0 for the shipping.