PayPal Payments Standard w/PowerStore
Not sure what the PayPal folks are telling you, but it is incorrect. One of the reasons we put PayPal Express Checkout into PowerStore is because it can accept credit cards (among other methods). If you are unsure, I'd suggest going through the purchase process on one of our products at webassist.com, and click the Pay with PayPal button. Don't buy it, unless you want it, but you'll see straight away that your customers will be able to enter their credit card details.
This is actually being discussed right now in another thread that you might find helpful: showthread.php?t=10422
With that said, i should also answer your follow-up question...
I always think it is better to get it working, then make changes. So, i think you'd be better off uploading remotely and setting it up to see that what you paid for works. Then, once PowerStore is installed on your remote server, do the following to install it locally
1. Download the files from your remote server to your XAMPP htdocs folder (or wherever you store your dynamic sites).
2. Define a Dreamweaver site to that location (configure the Local, Remote, and Testing Server info).
3. Create a .SQL dump from your remote PHPMyAdmin and import that to your local database.
This tutorial will help with the import process: importing_sql.pdf
4. Update the database connection file in your local site to contain the credentials for accessing your local database instead of your remote database.
For PowerStore 3 this is stored in Connections/PowerStoreConnection.php
Once that is done, you should have a working local version of your live PowerStore site. You can then make changes locally, and simply upload the updated files through Dreamweaver's built-in FTP to your live version.