I just tested my store using PayPal Sandbox and the order gets set to pending, but when i manually set the order to Delivered after i make sure the payment went though, the download buttong does not show for the customer. All it says is:

Date..................No..........Ship To........Status.........Total.....View
10/03/2006.......# 9......xxxxxxxxxx...Delivered......$3.50.....view

No download button.