Even though it has been a long time since you have posted this and may have fixed this/found another solution, I thought I'd mention the solutions for anyone else finding themselves on this page and lost for direction.
Problem 1 - Categories page and/or product list page all messed up, not showing pictures, text formatting, or even the Add to Cart button.
This is because the theme is set to display excerpts on Post category pages (which strips almost all formatting) and the newer versions of WP e-Commerce uses Post style product and category listings.
The solution: Go to Atahuapla Theme Options > Post & Pages > Configure EXCERPTS.
Under Except length - increase this number if you want the full product description to be displayed.
Under Don't strip these tags, add
<header><h1><h2><h3><h4><div><a><p><form><fieldset ><option><select><legend><table><tr><td><input><im g><footer><span><strong><i><b><font><em><br><br />
If you wanted you could also; Under headings such as Posts or excerpts on CATEGORY pages, etc, change from Excerpts Only to Full Posts.
I assume these changes would affect any blog post areas of your site too. The sites I've done these changes on were pure commerce without any blog style articles.
Problem 2 - I have no immediate solution for this.
Problem 3 - No right sidebar on category and product pages.
Juggledad found the solution here - http://forum.bytesforall.com/showthread.php?t=17880
It seems that the plugin is using SESSION's and that is messing up the Theme variables, but this might provide a 'get around' for it.
edit footer.php and change line 3 from
if ((!isset($bfa_ata)) or (class_exists('WP_eCommerce')) )
I don't know if it has affected you but my footer gets mashed up when using Atahualpa with WP e-Commerce - it gets squished into the left sidebar leaving a white gap at the bottom, in the middle and right side bar.
The solution; Edit footer.php;
Fix; edit theme file footer.php to remove the theme-controlled colspan attribute.
<!-- Footer -->
<td id="footer" colspan="<?php echo $cols; ?>">
<!-- Footer -->
<td id="footer" colspan="2"> (2 for a 1 side bar site, 3 for a 2 sidebar site)
Hope this helps. If you find these tips helpful, please consider donating to Juggledad