Thanks for the great questions.
1) when someone purchases via Paypal e-check, is the download DELAYED until the funds clear? And if not, is there a way to delay the email that sends the download cheque, otherwise they can get the product for free if their cheque does not clear.
No, at the present time ( s2Member v3.1.5 ), an e-check transaction passes through; just like any other transaction, without any concern for whether it's pending or not. This may change in a future release; but for now, you can either accept eChecks, or you can choose to NOT accept eChecks. If you would rather not accept
eCheck transactions, you can disable them from inside your PayPal account
( PayPal Account -> My Profile -> Payment Receiving Preferences )
2) if someone disputes via Paypal after paying for the product saying they did not receive the e-product, is there a log that can be shown to Paypal to prove that the download link was sent?
Yes. However, you will need to enable this feature. From your WP Dashboard, go to: s2Member -> PayPal Options -> Account Details, and enable s2Member's logging routines. s2Member will record when/why and to whom the email was sent. This information is stored inside:
/plugins/s2member-logs/paypal-ipn.log