Which integration method for PayPal should I use?

<form action="https://www.paypal.com/cgi-bin/webscr" method="post">
<input type="hidden" name="item_number" value="test product">
<input type="hidden" name="amount" value="19.95">
<input type="hidden" name="return" value="https://www.yoursite.com/paypalthanks.html">
<input type="hidden" name="cancel_return" value="https://www.yoursite.com">
<input type="image" src="https://images.paypal.com/images/x-click-but5.gif" border="0" name="submit">
</form>

As you can see, there are several fields e.g. amount, item_number, return,...

If there are the fields called notify_url and custom, you should follow the integration method of PayPal (IPN and custom field used by other script)from the merchant panel.
If there is only the notify_url field, you should follow the integration method of  PayPal (IPN used by other script)from the merchant panel.
If there is neither notify_url field nor custom field, you should follow the simple PayPal integration method from the merchant panel.

What if  I use hosted PayPal buttons?

- check in your PayPal account at if  you have a Global notification URL set up

• log in to your PayPal account and navigate to Profile > Selling Preferences > Instant Payment Notification Preferences and see if any Notification URL is set and if "Messages" are enabled
• you can click "Edit settings" and set an URL and/or  enable/disable the IPN messages by selecting
Recieve IPN messages (Enabled)
or
Do not recieve IPN messages (Disabled)   

- check in your PayPal account in the 'saved buttons'  for each of your paypal button if you use the 'custom' or 'notify_url' field (parameter) in your buttons

• log in to your PayPal account , navigate to Profile > Selling Preferences (or My selling tools) > Selling online (section that can be collapsed) > PayPal buttons > click "Update" and there you can see your paypal buttons OR after you logged in to your PayPal account try to visit the following URL: https://www.paypal.com/ca/cgi-bin/webscr?cmd=_button-management
It should take you to the same place as the navigation described above
• next to each of the saved buttons you can click "Action > Edit button" and in "Step 3: Customize advanced features (optional)" sub-menu see if the "Add advanced variables" is checked in and if there is anything in that box

If you have a Global notification URL set (or notify_url field is used in your paypal button) AND you also use a custom field in your paypal buttons, then choose the "PayPal (IPN and custom field used by other script)" integration method from the merchant panel.

If there is only a Global notification URL set (or notify_url field is used in your paypal button), BUT NO custom field in your paypal buttons, then choose the "PayPal (IPN used by other script)" integration method from the merchant panel.

If there is NEITHER Global notification URL set (or notify_url field is used in your paypal button) NOR custom field used in your paypal buttons, then choose the "PayPal" integration method from the merchant panel.

If you do not feel like checking the settings of saved hosted buttons, then you can create non-hosted PayPal buttons.