This transaction cannot be processed due to an invalid merchant configuration.
This is due to some settings of your PayPal merchant profile. You may have the direct pay option disabled or there might be some sort of agreement that needs to be confirmed. You should login to your PayPal merchant profile and check to see if there is a setting somewhere like this that will enable direct pay. If you cannot locate it you might need to talk to PayPal to see why you are getting this error.
I also noticed that the direct pay was using USD as the currency, you should be able to find this on the confirm page to update it. If you need to upload any files to the forum that are too large to upload directly you can put them in a zip archive first, the size limitation for zip should be large enough for any file.
Thanks Eric, I've finally managed to change that last 'USD' for 'GBP'. Regarding the direct pay, is it something to do with the dropdown option for 'states', im using N/A at the moment as i need to change it to UK counties. Could this be why its not going through?