To view the orders placed on your website

Login to VirtueMart and from the Administration Panel go to Orders > List Orders

Order Status

Order status is controlled in 2 ways:
1) By PayPal in reference to the transaction
2) By you, manually

How PayPal does it
When an order is created it will have a 'Pending' status, and will not be changed by PayPal until a transaction has been completed/attempted. When a customer completes a successful transaction with PayPal the order staus will be changed to 'Confirmed'. The order status will be changed to 'Cancelled' for a failed PayPal transaction.

How you can do it
You don't have to do anything if you don't want to. The advantage would be to help you keep records and to keep your customer informed - don't forget that customers have their own accounts on your website where they can login and view past orders and the status of those orders.

An easy system would be to let PayPal do its thing and when you have shipped an item, chage the status to 'Shipped'. Ticking the Notify Customer will send them an e-mail informing them of the change of status. To complete the update you must click Update Status