Paypal making changes to it's T&Cs

[Siliconslave]

So the payment I make to my website host (in the USA) won't be charged, and they will foot the extra 3.4%?

no, you shouldn't be charged anything to make the payment.

If your paying in $ and only have £ in your account you'll have to pay to convert it, but the charge gets rolled into the FX rate (in the same way you pay for currency conversion at the bank... its just a slightly worse rate than it was before)