Does anyone know what if there is a discount or incentive for using USPS Click and Ship as opposed to mailing from a brick and mortar post office? I like the slight discount from shipping with Pay Pal, but that service can only be used for eBay or Pay Pal transactions [or can it]?

The incentive is you don't have to wait in line for a half hour staring at the least efficient clerks EVER!!! But that's LA. Back where I grew up in the DC area, the clerks were excellent and the line always moved quickly. So if lines aren't a problem for you, just go to the post office.

Oh, also, Delivery Confirmation is free. I guess that counts as a discount.

That sounds pretty good. I hate the fact that the self-service machine does neither delivery confirmation nor media mail, so I'll probably start using this service. Thanks.

If you print Priority postage via Click n Ship, the Delivery Confirmation is free. You can also order free Priority supplies from the post office, and they'll deliver to you.
If I'm mailing Priority, I just charge a flat fee, stick it in the USPS-provided box, weigh it, and print a label [on regular paper]. If I'm doing First Class or media mail, I go to the PO, but mine is never busy.

Oh, so delivery confirmation is free only with Priority postage? If so, I think I'll save my toner.

I use the USPS shipping assistant software which lets me print shipping labels for either priority, first class, and media mail with free or discounted delivery confirmation. Free for priority and $0.13 for the other 2 shipping methods. Software download is free and requires adope acrobat reader 6.0 version to display and print labels. The one drawback is that you have to go to the post office to pay for the postage unlike click and ship which allows you to add pre-paid shipping labels. However click and ship is only for priority and express mail services. The shipping assistant works well for me since the majority of the packages I send are by either media and first class mail for items sold through Half.com. Here is the link to check it out.

http://www.usps.com/shippingassistant/

PayPal doesn't give a discount for shipping through them. But, you get the delivery confirmation, and can ship First Class, etc.

Do dvds fit in the small Priority Mail boxes you have? They sized those boxes for vhs tapes originally but I could swear I got a couple from the Post Office that fit dvd dimensions... can't find any more.

I've never found any that *exactly* fit a dvd, like those VHS ones did. That size is best for VHS or CDs [or CD-sized games]. I don't recall if I can fit a DVD into that VHS size one, i think the box is a little narrow, but I'll sometimes use a bigger box, and just fill the box with plastic bags from the grocery store, as lightweight padding. Turns out to be the same price.
I just noticed on the USPS website the other day they no longer sell/give away the rolls of Priority Mail tape : ( I had to use my own clear packing tape when I packed something the other day. Oh well, I can spring for a little tape.

What kind of scale do you use to weigh the items?

A while back when I was selling a lot of stuff on Half.com I bought a little 5-lb digital postal scale from BJ's for like 18 bucks I think. A slight overhead cost, but it's saved me lots of time by allowing me to weigh my own packages at home. Comes in handy in the kitchen too.

I found one from stamps.com on ebay and bought it a couple of years ago. Nice to have and it beats guessing or spending time in line!