What would be the benefits to having an estore versus having just a shopping cart? What would be the differences in hosting needs for each? I've saw quite a few people who are just setting up a website with the buy now button from paypal so I'm curious what the differences might be.
In order to remain compliant you would have to have a dedicated server to offer a shopping cart if you were hosting it yourself. Many people use PayPal or merchant accounts because they do not have to worry about processing and security.
You can install any of the shopping carts like Zencart, OSCommerce or Magento and then have some payment gateways like Paypal, 2Checkout, Moneybookers etc so that customers can make the payment via the preferred payment gateway.