In addition to the above, i just installed and ran the 'ipncheck.php' file and it seems fine:

IPNCHECK.PHP - Version 1.3.9

IPN TESTING - Response Received via CURL -- COMMUNICATIONS OKAY

IPN TESTING - Confirmation/Validation response with fsockopen(): FSOCKOPEN() RESPONSE RECEIVED - Communications OKAY
Default method likely to be used for communications is: CURL, with the fallback method being FSOCKOPEN if possible.Script finished.

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The error i am getting is exactly what's mentioned on this page:
http://www.zen-cart.com/forum/showthread.php?t=65680

Common symptoms of bad IPN communications:
- orders not showing up in Zen Cart but PayPal receipt issued when using PayPal IPN module

** The above is exactly what's going on with the site but the testing went fine **

I appreciate any help that can be offered...!!
Many thanx again,
Inspire...