In any case, if they have already sent it back you do NOT have to ship to an unconfirmed address...Tell them Paypal requires that you send to a confirmed address and that's just the way it is. And THEY are obligated to pay shipping for the second item.
DO NOT under any circumstances ship anything until you get the original item back.
If they ordered through a catalogue they would have to pay shipping twice (maybe), they would also lose the first shipping amt. they paid. And thay wouldn't recieve anything until said catalogue recieved the first item back.
Remember, Delivery Confirmation is your best friend
Side note...I ship to unconfirmed addresses all the time and have never had a problem. Of course the item wasn't worth $200 either.
You lose all your seller protection when you ship to an unconfirmed address. Go to paypal and change your preferences. You can block payments from bidders whose address is unconfirmed, but you'll need to state it in your auctions.