I followed all the instructions (although they don't match the current PayPal website whatsoever)
I have this setup: http://screencast.com/t/FEjfK3o3u
Yet at checkout I get
Error: There was an error processing your payment: (10507 Invalid Configuration) This transaction cannot be processed. Please contact PayPal Customer Service.
I did use a fake credit card number, was expecting to get an error that says "Invalid card" not "Invalid Configuration"