Hi,
I have a test site setup in Joomla 1.5 and VM 1.1 RC1 and I am using Paypal and the status's of orders where being updated fine to confirmed/cancelled etc but now I have upgraded to RC2 (have also tried RC3 on another test site) and the status's of orders are no longer being updated?
Please try VM 1.1 build 1339 or higher.