Unable to successfully decode paypal IPN

Question

I am building a subscription site. At its current state, the user would be able to pay the subscription but my handler cannot handle the IPN correctly. Here's the flow: Signup -> Subscribe -> Pay -> Return to site -> My handler -> Home. The user cannot login until my handler activates his account from the database. Here's my code:

<?php

require_once 'classes/Mysql.php';



 // define array to store PayPal request
   // as key-value pair
   $postvars = array();

   // read post from PayPal into local array 
   while (list ($key, $value) = each ($HTTP_POST_VARS)) {
       $postvars[] = $key;
   }

   // add a 'cmd' parameter to the parameter list that is POSTed // back, as required by   
     PayPal 

   $req = 'cmd=_notify-validate'; 

   // append each parameter posted by the PayPal // as name value pair to the "req" 
     variable 

   for ($var = 0; $var < count ($postvars); $var++) {

   $postvar_key = $postvars[$var];
   $postvar_value = $$postvars[$var];
   $req .= "&" . $postvar_key . "=" . urlencode ($postvar_value); }



// post the request back to PayPal system to validate 

   $header .= "POST /cgi-bin/webscr HTTP/1.0\r\n"; $header .= "Content-Type: application/x-   
   www-form-urlencoded\r\n";
   $header .= "Content-Length: " . strlen ($req) . "\r\n\r\n";

   // open file pointer to the paypal server 

   $fp = fsockopen ("www.paypal.com", 80, $errno, $errstr, 30);

   if (!$fp) {
       // HTTP error
       // log an error    
   } 
   else {

 // POST the data using the file pointer created above
 fputs ($fp, $header . $req);

 while (!feof($fp)) {

   // read the response from the PayPal server
   $res = fgets ($fp, 1024);

   // check if the request has been VERIFIED by PayPal 
   // if it is, then you can proceed further
   // if it is INVALID, then abort the process
   if (strcmp ($res, "VERIFIED") == 0) {

     // get the value stored in the "custom" field 
     // (username) in a local variable
     $username = $HTTP_POST_VARS["custom"];

     $mysql = New Mysql();

     // check if the username sent with the PayPal IPN request exists in the database
     // using a custom function called userExists()
     if($mysql->check_if_username_exists($username)) {

         $code = $mysql->get_confirmreg_code($username);

       // check the transaction type for the subscription sent by PayPal 
       // and take action accordingly
       if(isset($HTTP_POST_VARS["txn_type"]) && strtolower($HTTP_POST_VARS["txn_type"])  
       == "subscr_payment") {

         // a subscriber just paid
         // increase the subscription period by X days

         header("location: confirm.php?code=".$code."");

       } else {

         // incorrect transaction type
         // log an error 
         header("location: signup.php?paymenterror=true");

       } 

     }

   } else if (strcmp ($res, "INVALID") == 0) {

   // an INVALID transaction
   // log an error
    header("location: signup.php?paymenterror=true");

   }

 } 

}

I am sorry it's a bit long. When I tested it, it redirects me to signup.php wich I assume paypal failed to process it. Could you pls tell what's wrong with this? Im sorry for my english. I am too lazy to correct it for now. mind exploding