I have a Windows 2008 Server with IIS 7 which using a .NET C# Application to send requests to PayPal to process payments. A few months ago I installed a Certificate which wa
This other SO answer may be of assistance:
Issue with Paypal Payments Pro
In summary, you should just try it on the live PP server and see it it works :)
I think there is a chance that the problem is not in your client certificate, but in the one of PayPal.
On your question:
In Internet Explorer, I do see the Green "SSL Bar" which shows this site is verified as being secure. This tells me the Cert is installed correctly, is this true?
No, this means that the server certificate of PayPal is verified by your browser, i.e. the PayPal's certificate is signed by someone added as you certification authority. However, the PayPal's certificate is not added to your trusted certificates.
I noticed also, that PayPal's current certificate has validity from 23.3.2011. Maybe until then your application was working, and now that it was changed the application has stopped working.
Based on this I recommend trying to install PayPal's own certificate as a server certificate.