The biggest differences between the two licences is that the Personal Edition licence is only for use on 1 website, requires you to keep the footer credit intact, does not have transaction logging or PayPal IPN and apparently will not include Google Checkout as a payment option. The Small Business Edition licence can be used on up to 5 websites, allows you to remove the footer credit, and does include transaction logging and PayPal IPN and will include Google Checkout when it is available. You can view the
licence comparison chart if you wish.
1)Yes, the Personal Edition licence will allow you to accept PayPal Payments from customers for placing their ads.
2) Basically, PayPal IPN is a notification feature so you know when payments have been made... you can read more about it
here.