So in the extension manager, i deleted the PayPal extension, and then deleted the cache file in Documents and settings, as well as several other places where i found reference to PayPal that had been associated with the extension (evidently removing the extension didn't do a thorough job!).
I'm still plagued by this remaining error message, and i've restarted DW, etc.
The following translators were not loaded due to errors:
Unable to open script file "C: Program Files\Macromedia\Dreamweaver 8\Configuration\Shared\PayPal\PayPalShared.js" (error3)
XP Pro SP2