on the cart page, the code for the checkout button:
<input type="image" name="Checkout" id="Checkout" value="Checkout" alt="Checkout" src="WA_eCart/Images/Pacifica/Btn4_EN_checkout.gif" class="eC_ImageButton" />
is in the cart display form, so will not submit your checkout form
move that code s that it is in your checkout form instead.