I think you would have to ask Google this. Google Checkout is still fairly new, so perhaps more countries will be added over time.
PayPal is still a valid payment option for DreamHost, but unfortunately not for all potential customers. The way I understand it, if something about your application triggers the automated fraud detection system, you will be directed to pay via Google Checkout. Nobody outside of DreamHost is quite sure what triggers the fraud detection system, as DreamHost has (understandably) not released these details publicly.
I appreciate that, if I was in your position, I would be somewhat annoyed too. Unfortunately, with the prevalence of fraud on the Internet these days, I don't think companies such as DreamHost have much of a choice.
The process should be straight forward enough. Here in Australia, we can buy international money-orders from any post office. Unfortunately, this method of payment is not the quickest, as you need to wait for the money-order (or check) to reach DreamHost in California.
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