Note: It doesn't automatically add members to the usergroup, and I don't really know if it was supposed to.

There was an issue with subscriptions just like the donation mod.
The security is set so high, that it conflicted with the use of paypal.

When donating or subscribing, several things have to happen.
The user chooses to donate or subscribe, they eventually have to go to paypal to complete the transaction.
After the transaction is completed, paypal attempts to send the IPN log to your site. (This is a record of receipt of payment)
Because the security is set to high, paypals IP will get banned on your site for DDoS attack.

So to get the donation and subscription mod to work, you need to do the following:

1 ) go to admin area
2 ) go to Security>Special
3 ) set "DDoS Protection Level:" to LOW - Note on strong or medium, will cause paypal ip to be banned - Must be on LOW
4 ) SAVE

This will now allow you to receive the IPN log, which you can view at ACP>Subscriptions>IPN Log
Leave the box blank and just click on "Look Up User" - This will show activity in the last 7 days.
You can change the period of time to go back further if you choose.

Now on to the subscription part.