Before jumping in I\'d like to know what all of my options are, and, if possible their pros and cons.
The two I know of are using ActiveMerchant, or the paypal_recurring
I'm currently looking at Ryan Bates example of Stripe. They are a California based company that uses/offers the features you have listed.
www.stripe.com
They only charge when you receive money. I think that they are 3% plus $0.30 per successful transaction. Much better than some other companies that have a monthly minimum. Right now you have to have a bank in the USA to use their services as a merchant. However, anyone can use your site with out of the country credit cards.