Hi Robert,
Had to look at what I did since its been awhile since I set it up. The bottom of my instructions in the Moodle documentation describe the workflow. As for the return link on the Paypal side, the answer is "yes". In the advance option section there is a field "Take customers to the URL when they finish checkout" and I route them to my Moodle login page. As for a Thank You, I do that with an email instead. This process is working for me.
Workflow - Now the workflow goes like this:
* On your website link to the main login page for Moodle (mine looks like: http://<domain name>/moodle/login/index.php)
* Click the "Create new account" button
# Fill in the form (this is the "Email-based self-registration" form with the reCAPTCHA at the bottom) and click the "Create my new account" button
# You will get a web page saying to check your email for instructions on completing your registration.
* Log into your email and you should have an email. It will have a URL to click in order to confirm the new account. Click it.
* A new Moodle page will appear saying "Thanks, <name>" "Your registration has been confirmed"
# Click the "courses" button
* Now it lists all the courses available. When you click on one of the course names that you want to take, it brings you to a page that has the course summary and the price displayed. Below this is another section that says "This course requires a payment for entry", shows the price and now has a PayPal button that says "Send payment via PayPal". Clicking this sends you to PayPal with the course lised in the order summary and you can log in to pay.
# Once done paying you will receive an email confirmation and a link to the main Moodle login page that you provided in the Paypal setup.
# The user should be able to log in now.