As mentioned in the following thread:

http://premium.wpmudev.org/forums/topic/issue-with-free-products-in-marketpress-using-paypal-express

Currently a seller can not offer his product for free whilst charging for shipping if they use Paypal.

If a seller puts his product free they will get a paypal error when a customer wants to pay for shipping. Thus meaning the customer is inconvenienced cant get his free product and the seller cant offer his products.

+20 from me on being able to offer free products whilst charging for shipping and using Paypal to collect shipping fee. :-)