I'm searching for some type of billing software or cart software or something.
What I want it to do is, customer sees the "buy now" link, so they click it. It then brings them to a cart with the name of the item they are purchasing, then moves on and integrates with paypal for payment and sends them and invoice etc. Does paypal have their own shopping cart type system?
A PayPal account that allows you to use the PayPal shopping cart API has ongoing monthly fees similar to traditional merchant accounts with payment gateway access. I'm not sure what the advantage is over a traditional merchant account.
However, you can use PayPal "buttons" to accept payments with a standard "premier" account, with no monthly fees (there are still per-transaction fees, of course). The PayPal button can also be configured for recurring billing, where PayPal takes care of all future subscription payments for that subscriber.
I am about to install a Groupon-mod/clone to my site. It was actually free, but they charge an affiliate fee...which works in my case. I only accept PayPal on this site too. The only thing is that its a Magento site.