This is how to get worldpay_notify.php call back working for virtuemart 1.1.4 and joomla 1.5.  I will be modifying it soon to email the customer with the new confirmed/cancelled status of their order.  The worldpay_notify.php does not work that is included with the virtue mart extension for joomla. Download worldpay_notifiy.zip which contains the code below.

 //error_reporting(E_ALL);
 //ini_set("display_errors", 1);

/*
* @version $Id: worldpay_notify.php 617 2007-01-04 19:43:08Z soeren_nb $
* @package VirtueMart
* @subpackage Payment
*
* @copyright (C) 2004 Soeren Eberhardt
* @license http://www.gnu.org/copyleft/gpl.html GNU/GPL
* VirtueMart is Free Software.
* VirtueMart comes with absolute no warranty.
*
* www.virtuemart.net
*/
define ('PAYPAL_DEBUG', '0');


$messages = Array();
function debug_msg( $msg ) {
    global $messages;
    if( PAYPAL_DEBUG == "1" ) {
        if( !defined( "_DEBUG_HEADER")  ) {
            echo "
PayPal Notify.php Debug OUTPUT
";
            define( "_DEBUG_HEADER", "1" );
        }
        $messages[] = "
$msg
";
        echo end( $messages );
    }
}
	
if ($_POST) {
	header("HTTP/1.0 200 OK");

    global $mosConfig_absolute_path, $mosConfig_live_site, $mosConfig_lang, $database,
    $mosConfig_mailfrom, $mosConfig_fromname;
    
        /*** access Joomla's configuration file ***/
        $my_path = dirname(__FILE__);
        
        if( file_exists($my_path."/../../../configuration.php")) {
            $absolute_path = dirname( $my_path."/../../../configuration.php" );
            require_once($my_path."/../../../configuration.php");
        }
        elseif( file_exists($my_path."/../../configuration.php")){
            $absolute_path = dirname( $my_path."/../../configuration.php" );
            require_once($my_path."/../../configuration.php");
        }
        elseif( file_exists($my_path."/configuration.php")){
            $absolute_path = dirname( $my_path."/configuration.php" );
            require_once( $my_path."/configuration.php" );
        }
        else {
            die( "Joomla Configuration File not found!" );
        }
        
        $absolute_path = realpath( $absolute_path );
        
        // Set up the appropriate CMS framework
        if( class_exists( 'jconfig' ) ) {
			define( '_JEXEC', 1 );
			define( 'JPATH_BASE', $absolute_path );
			define( 'DS', DIRECTORY_SEPARATOR );
			
			// Load the framework
			require_once ( JPATH_BASE . DS . 'includes' . DS . 'defines.php' );
			require_once ( JPATH_BASE . DS . 'includes' . DS . 'framework.php' );

			// create the mainframe object
			$mainframe = & JFactory::getApplication( 'site' );
			
			// Initialize the framework
			$mainframe->initialise();
			
			// load system plugin group
			JPluginHelper::importPlugin( 'system' );
			
			// trigger the onBeforeStart events
			$mainframe->triggerEvent( 'onBeforeStart' );
			$lang =& JFactory::getLanguage();
			$mosConfig_lang = $GLOBALS['mosConfig_lang']          = strtolower( $lang->getBackwardLang() );
			// Adjust the live site path
			$mosConfig_live_site = str_replace('/administrator/components/com_virtuemart', '', JURI::base());
			$mosConfig_absolute_path = JPATH_BASE;
        } else {
        	define('_VALID_MOS', '1');
        	require_once($mosConfig_absolute_path. '/includes/joomla.php');
        	require_once($mosConfig_absolute_path. '/includes/database.php');
        	$database = new database( $mosConfig_host, $mosConfig_user, $mosConfig_password, $mosConfig_db, $mosConfig_dbprefix );
        	$mainframe = new mosMainFrame($database, 'com_virtuemart', $mosConfig_absolute_path );
        }

        // load Joomla Language File
        if (file_exists( $mosConfig_absolute_path. '/language/'.$mosConfig_lang.'.php' )) {
            require_once( $mosConfig_absolute_path. '/language/'.$mosConfig_lang.'.php' );
        }
        elseif (file_exists( $mosConfig_absolute_path. '/language/english.php' )) {
            require_once( $mosConfig_absolute_path. '/language/english.php' );
        }
    /*** END of Joomla config ***/
	
    debug_msg( "1. Finished Initialization of the worldpay_notify.php script" );

    /*** VirtueMart part ***/

    define('PHPSHOPPATH', $mosConfig_absolute_path.'/administrator/components/com_virtuemart/');

    require_once( PHPSHOPPATH."virtuemart.cfg.php");

	require_once( CLASSPATH. "language.class.php" );
	
	debug_msg( "1a. Included language class" );

	
    //Set up the mailer to infor Warehouse of validated order
    //require_once( $mosConfig_absolute_path . '/includes/phpmailer/class.phpmailer.php');
    //$mail = new mosPHPMailer();
    //$mail->PluginDir = $mosConfig_absolute_path . '/includes/phpmailer/';
    //$mail->SetLanguage("en", $mosConfig_absolute_path . '/includes/phpmailer/language/');
  

    /* load the VirtueMart Language File */
   /* if (file_exists( ADMINPATH. 'languages/admin/'.$mosConfig_lang.'.php' )) {
      require_once( ADMINPATH. 'languages/admin/'.$mosConfig_lang.'.php' );
	} else {
      require_once( ADMINPATH. 'languages/admin/english.php' );
	}
	*/
	debug_msg( "2. Included admin language files" );

    /* 
    Moded
    Gotta replace this...perhaps
    Load the PayPal Configuration File 
    */ 
    require_once( CLASSPATH. 'payment/ps_worldpay.cfg.php' );



    /* Load the VirtueMart database class */
    require_once( CLASSPATH. 'ps_database.php' );
	
	debug_msg( "3. PS_database loaded" );


    /*** END VirtueMart part ***/

    /**
    Read in the post from worldpay.
    Email was used in PayPal version

    **/
    $workstring = 'cmd=_notify-validate'; // Notify validate
    $i = 1;
    foreach ($_POST as $ipnkey => $ipnval) {
        if (get_magic_quotes_gpc())
            // Fix issue with magic quotes
            $ipnval = stripslashes ($ipnval);
            
       if (!eregi("^[_0-9a-z-]{1,30}$",$ipnkey)  || !strcasecmp ($ipnkey, 'cmd'))  { 
            // ^ Antidote to potential variable injection and poisoning
            unset ($ipnkey); 
            unset ($ipnval); 
        } 
       // Eliminate the above
        // Remove empty keys (not values)
        if (@$ipnkey != '') { 
          //unset ($_POST); // Destroy the original ipn post array, sniff...
          $workstring.='&'.@$ipnkey.'='.urlencode(@$ipnval); 
        }
       echo "key ".$i++.": $ipnkey, value: $ipnval
";
    } // Notify string
	
	debug_msg( "4. Got post values" );


    $payment_status  = trim(stripslashes($_POST['transStatus'])); //if $payment_status == 'Y'?
    $order_id =  trim(stripslashes($_POST['cartId']));
    
    $d['order_id'] = $order_id;    //this identifies the order record

    if( $payment_status == 'Y' ){
        $d['order_status'] = 'C';  //this is the new value for the database field I think X for cancelled, C for confirmed
    }
    else if( $payment_status == 'C' ){
        $d['order_status'] = 'X';  //this is the new value for the database field I think X for cancelled, C for confirmed
    }

    require_once ( CLASSPATH . 'ps_order.php' );

    $ps_order= new ps_order;

    $ps_order->order_status_update($d);
	
	debug_msg( "5. Updated Table" );

}