I'm having an issue with my VPS provider, and I need to dispute a transaction (see the thread I just created for details). The way my Paypal is setup the invoice comes through every month, and my Paypal automatically gets money from my credit card, and uses it to pay the invoice.

Am I supposed to dispute this through Paypal, or my credit card company?

PayPal will not do anything with service disputes. There is no way to dispute a service item.

If you file a dispute anyhow selecting other options the claim will be dismissed once the merchant makes PayPal aware it's a service.

If you do a chargeback through your credit card company it will just negative your PayPal account.

The best thing to do is work it out with the merchant. Unless this is an un-authorized transaction, if it's an un-authorized transaction it will not negative your PayPal account and it may go against the merchant.

You didn't link your thread so im not sure what your situation is.

I will recommend that you disputes that through your CC company. Paypal will not help you with because is a intangible product...