I am having a problem with downloadables as well. Not with the pricing but with the payment.
I sell both downloads and hard goods. If someone purchases a hard good I have no problems.
But if they only try to purchase a download we get a
Payment transaction failed.
Ship To First Name is required.
There are no shipping information or shipping options available in the carts for just downloads therefore the ship to first name cannot be input.
I do not get this problem when the price is set to 0.
Does it have something to do with my cc processor? I use authorize.net.