PayPal verification may be the reason?

I am still setting up and testing things on my server. When I try to make a test purchase I get the message
Transaction Not Completed
We're sorry Your PayPal transaction could not be completed. Please return to checkout and try again.
It that because I still need to verify my PayPal account or is there another problem, items show up in the cart like they are supposed to, but when I click the PayPal pay now button, I get the above error. After this part of the testing its time to test the Federal Express shipping options, which I have already put all the account info in the admin pages, but don't see anything that gives customers the options to ship anything from the store, no buttons, no other popups, nothing, any ideas?
Thanks for any help