But here is the thing, the dispute said the transaction was unauthorized. Somehow I gained access to the account. However, if either the customer or paypal would have actually looked at the transaction they would have seen it was a renewal, from Nov 2007. And as a subscription it was already authorized.
So, the lesson:
If I continue to use annual subscriptions, and paypal you need to send manual reminders prior to the upcoming transaction date.
Some shopping carts can be automatically configured to send notices prior to the transactions.