I have a Paypal international account, I'm located in canada and so is my bank account. What I need to know is if someone from the US sends me, lets say $10 would I recieve it as $10 US or $10 Canadian?

I'm not 100% sure, but I believe you'd get the $10 US (minus the paypal transaction fee). That only makes sense, considering $10 is what will be deducted from the sender's account.

I contacted paypal service dept. via e-mail and they told me it is sent in US funds.

Thanks,

Steve

The money is automatically converted to Canadian which is $15.36 CAD. Do currency conversions here http://www.xe.com/ .

Umm...
Call me stupid but I don't know of a way to use paypal in any currency other than US... I am also in Canada, and I use paypal. I receive only US dollars and everything to do with paypal is in US dollars...
However if you are talking about when you withdraw it from your paypal account to your bank account... thats different, unles you have a US dollar account it will convert it to Canadian Dollars.
I just use the Paypal MasterCard to get my money out, it also converts the money to Canadian dollars on the spot when I use it here.

I'm in Israel and all my transactions have been in USD. Of course, if I draw money off my charge card, the charge is converted to shekels.