Does anyone have experience setting up shipping for a mailorder/web business. We would like to segregate:
-shipping and handling we charge to customers on Invoices.
-Freight that is included on purchase orders when ordering inventory.
-Internal Day to day shipping and postage.

Our main incentive is to make sure we are charging enough on shipping and handling to cover costs and to be able to amortize the freight in the costs of good for our inventory.

You need to create some new accounts. An Income type account called Shipping & Handling Sales and an Other Charge type Invoice Item that links to that Income account.
You need a CGS type account called Freight In and when you Write Checks or Enter Bills, you should use this account for the Freight and Shipping on purchased goods.
Then you need another Expense type account called Postage & Delivery Charges expense to record expenses for normal postage and delivery charges.
Then you will be able to see them separately on your Profit & Loss Report.