What Merlin was saying is ...

Set the settings in PayPal site to work for 1 of your 2 stores ...

Now, set the settings in both of your Zen Cart stores correctly when you install the PayPal Payment module ...

Zen Cart will override the settings that PayPal site knows and send the correct settings for each of the 2 sites that you have ...

NOTE: There is a PayPal Patch for Zen Cart v1.3.7 that you will want to obtain the most recent Patch and install carefully on your site after you have read through the instructions carefully, 3 times, to ensure that you did not miss a word ... er ... step ...

http://www.zen-cart.com/forum/showthread.php?t=56216