Actually there are some big vendors that allow PayPal "preapproved payments" to be set up with PayPal through their sites/applications that allow dynamic payments to be made (either manually when one is shopping in their store, or for subscription-like payments).
Having programmed PayPal integration stuff in the past myself, I understand your frustration with the documentation, and the fact that there are different APIs for doing different things... and I assume the Preapproved Payments functionality is probably harder to deal with than the standard stuff... but it's definitely possible.
Is there not a way to work directly with PayPal support for help to make it happen? I would also like to be able to set up a PayPal "Preapproved Payment" for DreamHost.
Actually, I did a quick Google while writing this and have to admit, it looks like the PayPal Developer site might have had an overhaul for the better.
Take a look at this API and see if this might help you make it happen:
PayPal Adaptive Payments API
Thanks DreamHost! And best of luck making it happen... it would make things much easier for us, and lift some PCI compliance burden off of you!