OK, here's another way to Send Money via PayPal - to Friends & Family, using OWB.

Once you've logged into PayPal, you need to select Send & Request, then choose from the 4 sub-options - the right hand one > More, or choose the lower right hand option Send to friends abroad, if you chose the More option then you will have the option at the top most left hand side of the browser to Send Money Abroad > Send Money, which is the same as the previous page of Send to friends abroad where you can then enter the email/payment details you want to, along with a note to the recipient.

So this PayPal feature is actually still possible, and I know it works as I found the address I sent the money to added to my list of contacts after the payment had been made. So the contact/friend/relative does not actually need to be abroad with this option it works for anyone with an email account who has a PayPal account associated to it.