PERL 
(requires LWP::UserAgent SSL encryption requires Crypt::SSLeay)

#!/usr/local/bin/perl

# read post from PayPal system and add 'cmd'
read (STDIN, $query, $ENV{'CONTENT_LENGTH'});
$query .= '&cmd=_notify-validate';

# post back to PayPal system to validate
use LWP::UserAgent;
$ua = new LWP::UserAgent;
$req = new HTTP::Request 'POST','http://www.paypal.com/cgi-bin/webscr'
+;
# note: if you have SSL encryption Enabled, use 

<https://www.paypal.com/cgi-bin/webscr> above
$req->content_type('application/x-www-form-urlencoded');
$req->content($query);
$res = $ua->request($req);

# split posted variables into pairs
@pairs = split(/&/, $query);
$count = 0;
foreach $pair (@pairs) {
($name, $value) = split(/=/, $pair);
$value =~ tr/+/ /;
$value =~ s/%([a-fA-F0-9][a-fA-F0-9])/pack("C", hex($1))/eg;
$variable{$name} = $value;
$count++;
}

# assign posted variables to local variables
# note: additional IPN variables also available -- see IPN documentati
+on
$item_name = $variable{'item_name'};
$receiver_email = $variable{'receiver_email'};
$item_number = $variable{'item_number'};
$invoice = $variable{'invoice'};
$payment_status = $variable{'payment_status'};
$payment_gross = $variable{'payment_gross'};
$txn_id = $variable{'txn_id'};
$payer_email = $variable{'payer_email'};

if ($res->is_error) {
# HTTP error
}
elsif ($res->content eq 'VERIFIED') {
# check the payment_status=Completed
# check that txn_id has not been previously processed
# check that receiver_email is an email address in your PayPal account
# process payment
}
elsif ($res->content eq 'INVALID') {
# log for manual investigation
}
else {
# error
}
print "content-type: text/plain\n\nOK\n";
[download]

Well, apart from other answers, by all means please consider to use CGI;. Most likely this will shrink the size of the script you need to parse the IPN query / response and make it more robust.

Happy new year to all monks!

print $ipn->cgi->header('text/plain');
[download]