I found out more. If I use fixed shipping methods using this code in my XM:

<flat-rate-shipping name="Flat Rate: Flat Rate Per Order"> <price currency="GBP">3</price> <shipping-restrictions> <allow-us-po-box>true</allow-us-po-box> <allowed-areas> <us-country-area country-area="ALL" /> </allowed-areas> </shipping-restrictions> </flat-rate-shipping> <flat-rate-shipping name="Flat Rate: Flat Rate Per Order intl"> <price currency="GBP">3</price> <shipping-restrictions> <allow-us-po-box>true</allow-us-po-box> <allowed-areas> <world-area /> </allowed-areas> <excluded-areas> <postal-area> <country-code>US</country-code> </postal-area> </excluded-areas> </shipping-restrictions> </flat-rate-shipping> <flat-rate-shipping name="Item: Flat Rate Per Item"> <price currency="GBP">2.5</price> <shipping-restrictions> <allow-us-po-box>true</allow-us-po-box> <allowed-areas> <us-country-area country-area="ALL" /> </allowed-areas> </shipping-restrictions> </flat-rate-shipping>

It works. If I use merchant calculated shipping with this xml code, it doesn't work:

<merchant-calculated-shipping name="Per Item"> <price currency="GBP">2.5000</price> <shipping-restrictions> <allow-us-po-box>true</allow-us-po-box> <allowed-areas> <world-area /> </allowed-areas> <excluded-areas> <postal-area> <country-code>GB</country-code> </postal-area> </excluded-areas> </shipping-restrictions> </merchant-calculated-shipping>

This (I think) should have allowed shipping to anywhere in the world but Great Britain. It doesn't. That suggest to me a problem with either the documentation or Google's Checkout with the merchant calculation.

I looked at Ropu's code for OSC and that doesn't use merchant- calculated-shipping