[DragonByte Tech]

Can you check the following three items?

1. Check your Paypal IPN History page (in your Paypal account) and make sure that IPNs are not currently disabled. Note that disabled is different than turned off (more on that later). To see if IPNs are disabled, check your IPN history (My Account => History => IPN History), do a search for recent IPNs, and see if your recent IPN messages have a delivery status of "disabled" (Look for Delivery status Disabled). If they are disabled, then contact Paypal to get them re-enabled. Until you do this no IPNs will work.
2. Check your Paypal IPN settings and make sure IPNs are turned off (not disabled) for your account. To check this, visit your IPN History page (My Account => History => IPN History); it should say: "The IPN feature is turned off. You must turn on IPN in order to create history data." If instead of that message, it shows a field with your Notification URL, then you need to turn the feature off. This needs to be off because (a) it is not necessary, since vBDonate sends Paypal the correct URL to send the IPN to along with the payment request.* (This is the notify_url parameter in the vbdonate_gateway.php file). (b) If you have your vBulletin URL there, then Paypal will send IPN messages for all of your Paypal transactions, not only the ones that originate from your vBDonate installation. This will eventually cause Paypal to disable (see point #1) IPN for your account due to the failed IPNs.
3. Make sure your Forum URL is correct in your vBulletin settings. (vBulletin Options => Site Name / URL / Contact Details => Forum URL) It should be the URL to your forums, with no trailing slash (/). The notify_url parameter is generated using this setting.

* Paypal will send the IPN message even when the IPN feature is turned off in your Paypal account [reference]

The IPN message will always be sent to your notification URL unless receiving IPNs have been disabled. Even though you have not enabled receiving IPN messages in your Profile or you have reset your preference by turning off IPN messages, PayPal still sends IPN messages to the notification URL you specify for a specific payment.

The difference between "turned off" and "disabled" is confusing. I'll try to clarify:

Turned off -- This is if you choose to turn off the IPN feature in the Paypal interface.
Disabled -- This is an automatic Paypal sanction that is applied to accounts that have too many failed IPN messages. (has nothing to do with you turning the IPN feature on or off)

Chris