First, I recently made this Guide for eBay. It explains a lot. Maybe you will find it helpful some and vote "yes" at the bottom of the page:
Introduction to Printing PayPal Shipping/Postage Labels
http://reviews.ebay.com/Introduction-to-printing-shipping-labels-and-postage_W0QQugidZ10000000004429200

Here I comment on some of the points and questions raised in the thead made earlier today:
¶ true, that to use Delivery Confirmation and to avoid being upgraded to Priority Mail, the mail piece must be over 3/4" thick at some point. It was mentioned that tissue paper or bubble wrap could be inserted. Another Idea is to insert some Styrofoam peanuts.

¶ I don't see why mail with the PayPal or Click N Ship labels should be scanned differently than the ones with the green labels. I have heard that your mail is more likely to be scanned on pickup if you stand on line and go to a live clerk. But two comments -- it doesn't matter for Delivery Confirmation if it is scanned or not on PICK-UP. It doesn't help you with PayPal's Seller Protection Policy. It is scanning on delivery that matters. You could always circle the bar codes on the label with a bright green marker to remind the letter carrier to scan it. It is not worth standing in line just to give the mail to a clerk to scan; it accomplishes little of value. If you use a LABEL for insurance, the insurance is valid even if it was never scanned.

¶ Yes, the cheap LETTER rate piece must not be over 1/4" thick, but it MAY be rigid and uneven. If it is uneven, lumpy, etc (except for keys, I think), you can mail it first class LETTER rate if you add an extra $0.17 in postage -- nonmachinable surcharge, it is called. Simple as that.

¶ first class FLATS (LARGE ENVELOPE) RATES confuse me. If it is lumpy or uneven or badly rigid, it gets bumped up to first class PARCEL rate. So if I mail a chip, and the mail piece is over 1/4", I go for the PARCEL rate and make sure it is over 3/4" thick.

I do what some post offices do -- I have a cardboard template made that has cuts of 1/4" and 3/4". It is worth the effort to make.

To get inexpensive, strong chips in a letter 1/4" or less, I use paper and tape like this, and write "hand cancel" on the envelope. (Not so good if you have a high volume of chip mail -- time factor):

Finally here is aneat chart that Steve Margolis kindly posted yesterday. It seems to explain virtually all of this. You can bookmark the jpeg ( http://www.antiquegamblingchips.com/pictures/PO_FirstClassGreat.jpg ):

Robert

auction ending soon:
H.C.Edwards advertising poker chip:inlaid, dice,1950's

Item number: 150182718554

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&ssPageName=STRK:MESEX:IT&item=150182718554