DT Register works just fine with PayPal. This has to be either a problem with your setup or the PayPal account. Verify that you have typed the email address in correctly to your pay options setup in DT Register... and have no spaces before or after.
You can put in a different PayPal account email address in the settings and see if that works. If so, you know it's the account. If not, you know it's a setup problem elsewhere. At that point, you could submit a ticket with admin access and we'll take a look.
Nathan is no longer affiliated with DTH since the recent acquisition. You can connect with him and get any type of Joomla website help at
www.JoomlaEmployee.com
.