Well, there's also another problem. I've shipped to Australia, Canada, France, England and Scotland and have only run into this in Canada. If you ship with UPS, they charge a huge fee once it gets there. I've never had to deal with this, as my first Canadian customer warned me about it. Absolutely, ship via USPS and use flatrate if you can. They only have envelopes and the weight limit is 4 pounds. It costs between $7.50 and $9.50 for the places I mentioned. Also, if you list the value high, they'll charge a tax to your customer.
If you use flatrate envelopes (Global Priority Mail), you use the green customs form. If you ship more than 4 pounds, or in a bigger box that isn't flatrate, you use a white form. It's a hastle to be sure, but people are worth it. I just found out what Jim said, that you can do a "click-n-ship" overseas too, but I didn't know you couldn't use insurance. That makes sense of course. It's something of a beurocratic nightmare at times, but once you get used to it, it isn't bad.
I'm shipping to France in two days, flatrate, no insurance. I'm doing my first overseas click-n-ship package. You can also order supplies for shipping from the USPS free and can buy stamps online also.
Good luck. It gets easier with time. Oh yeah, if you think about it, any store waits for payment before the product leaves the premesis. I used to feel funny waiting for a check to arrive, and I don't always do it, if I know the person. People don't expect you to ship, until you get payment anyway. It's just good business policy, unless you know the person well and there's a good reason. Paypal is fast, so there's usually isn't much reason to request goods before you pay for it with paypal. There are sometimes exceptions. A friend recently made a very large purchase and I offered to take two payments. He's a friend, so I shipped before the 2nd payment arrived.
Feel free to e-mail me, if you have other questions.
Rob