I tried the Lite and the template doesn't handle it correctly...however, in either case, even without Lite, Paypal and Gift Certificate options should do their own thing. They have nothing to do with X-Payments....they are completely separate Payment Methods. It is like if X-Payments is enabled, the system goes to it no matter what payment method is selected.
Right now, I don't care if X-Payments payment method goes to X-Payments URL, I just need paypal and gift certificate to work. Right now, Paypal doesn't go to Paypal.com and Gift Certificate doesn't give option to enter a gift cert.
Here is a video explaining what I mean:
http://screencast.com/t/GI5DcHumO