I've installed an entirely fresh version of google checkout on a live site tonight to see if I could replicate your problem.

OK. STOP STOP STOP

As I guessed earlier the problem is that you don't have a working set up, and what you have is a "normal" mistake that normally gets picked up a few days into the first UK installation.

Go to that place with the Tare and put 10%:0 please. What you have with 0:3 is you have it adding 3 lbs or kilos to every order for the packaging weight ! that's why you are going backwards in weight. You do not need to change royal mail for kilos etc, somewhere you must have changed the text to Kg's already, so all you have to do is fix the Tare with whatever you feel comfortable with and then re-install royalmail and things should start working correctly. Then google should work.

Oh yes, when correctly installed Google does disappear in the checkout and re-appears as that button, and if you get an error saying wrong country, you've got the google calculated shipping rates set to True, as that's a USA only version.