Hi Keith;
>> 1. The process for granting a login. User pays a fee say through PayPal and I manually send a password and record them on my database. Could this process be automated?
Any process can be automated given enough time, and skill.
>> 2. Passwords and security. If, on the standard log in form a user enters user Id = John, Password = mydoghasfleas then isn't it the case that the id and password would be sent in text to the server and therefore would not be secure?
correct - hence the use of SSL if this is not ideal. (In most cases, if you have a Login, then SSL should be desired.)
>> Is the simplest way to obtain security here to use Secwin?
It's not the simplest - see example 3 for the simplest - but it's probably the most comprehensive. (It might be overkill if this is a simple-login scenario though.)
cheers
Bruce