Quick guide to save time: in google checkout merchant account under Settings – Integration: leave unchecked “my company will only post digitally signed carts”; API callback URL must be HTTPS (even shared as in my case; found in CPanel), Notification as HTML, API ver. 2.0.
If you are in the UK in Image Store settings for Google Checkout the country code should be GB. Country code UK returns error in the Google Checkout console as “unknown country code”.
Hax, thanks for your explanation regarding “images upload folder”.