IPN with PayPal

It seems that IPN is the best choice for an online merchant system with PayPal. In order to test the system I have taken the advice to set up a sandbox first.

I seem to be having some problems with doing this. First of all, there is a list of types to pick:

http://www.arguemax.com/sandbox/sandbox%20001.jpg

From this list, I picked "Web Accept".

This page asks for the "IPN handler URL". I assume this is supposed to be the URL of the page that we set up that to be used as the location where PAYPAL sends confirmation to and the page has PHP and MYSQL script to put a confirmation in the database.

Anyway, I got an error message:

http://www.arguemax.com/sandbox/sandbox%20002.jpg

Did I do something wrong or is it the fault of the sandbox?

I'm not sure anyone active on WinDrivers these days will have expertise in this area, I certainly don't.

I guess you've investigated the information here and the sandbox user guide from here?