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Do I need to use Paypals IPN functionality?

You should not need to configure the IPN within Paypal. The store does use IPN but this is setup automatically when a transaction is sent to Paypal. If you have previously disabled IPN you will need to re enable it.

These are the steps to follow to enable IPN: 
1. Go to the PayPal website and log in to your account. 
2. Click "Profile" at the top of the page. 
3. Click "Instant Payment Notification Preferences" in the Selling Preferences column. 
4. Click "Turn off" to set IPN to an 'Off' state. 
5. Click "Edit Settings." 
6. Select "Receive IPN messages (Enabled)" 
7. Click "Save."

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