What i have heard from people is that using Google Checkout as the only option is significantly worse than using paypal as the only option. Providing the option between the two gives a marginally better conversion rate.
We had google checkout and paypal as payment options. The difference was easily 10:1 in favor of paypal. People paying from overseas prefer paypal significantly.
"Google Checkout is an alternative checkout flow you can use to process sales. While Checkout is designed primarily for transactions involving tangible and digital goods, you may also process transactions for services, subscriptions, and donations (if your organization is 501c3 tax-exempt). All transactions must abide by our content policies. Google Checkout cannot be used as a person to person money transfer service at this time."
Check the discussion here http://www.invesp.com/blog/ecommerce/paypal-vs-google-checko...