I got my problem fixed thanks to "iofast". Here is what fixed the usps shipping errors for me after the capitolization upgrade.
I don't know who has noticed yet but USPS has decided to mess with thousands of vendors all across the world by changing their descriptions in the code they send to caps. Seems like a small change and I bet the new programmer their didn't realize what he did but he broke most oscommerce stores using usps.php either in mvs or the standard oscommerce. This change likely broke MANY other carts too and they will probably change it back when they realize what chaos they have caused with such a silly change.
In any case, for mvs, this is how you fix the problem:
/includes/modules/vendors_shipping/usps.php
change all cases of Express where is named ALONE, ie not Global Express Mail, to EXPRESS
change all cases of Priority where is named ALONE, ie not International Priority Mail, to PRIORITY
change all cases of First Class where is named ALONE, ie not First Class Mail International , to FIRST CLASS
change all cases of Parcel where is named ALONE, ie not International Parcel Post, to PARCEL
I can't list the exact locations for you because my usps.php file is changed, here is an example of a changed location
OLD:
$this->types = array('Express' => 'Express Mail',
'First Class' => 'First-Class Mail',
'Priority' => 'Priority Mail',
'Parcel' => 'Parcel Post');
NEW:
$this->types = array('EXPRESS' => 'Express Mail',
'FIRST CLASS' => 'First-Class Mail',
'PRIORITY' => 'Priority Mail',
'PARCEL' => 'Parcel Post');
After you make this change you STILL need to go in the DB and make some changes.
The first thing you need to do is unselect all but one of the USPS shipping options in the admin panel under USPS located under the Manage section for each vendor. We unselected all but Parcel as an example for each vendor. We then went into the table 'vendor_configuration' and edited all rows that match 'Domestic Shipping Methods' in the field 'configuration_title' and also shows USPS somewhere in the field of configuration_key. Once you have those rows ready to be edited in phpMyAdmin or your editor of choice upper case the values for the 'configuration_value' that you deselected. For example we changed our 'configuration_value' to
EXPRESS, PRIORITY, FIRST CLASS, Parcel
and make the same change to 'set_function' such as:
tep_cfg_select_multioption(array('EXPRESS', 'PRIORITY', 'FIRST CLASS', 'Parcel'),
Once these changes are made go back and enable the methods you just disabled and disable the method you left on. Now go back to your DB editor and change the final lower case term (Parcel in our example above) to upper case as we had done to the first the classes listed above.
New 
