This one has me quite confused.
I'm unable to select a payment method as a guest in my checkout. However I can see a payment method if I use a registered account.
I only have one shipping method (flat rate shipping) and only one payment method (paypal standard).
Auto select is ticked for the shipping method.
As I said, it works perfectly when I use a registered account (default customer group) but only shipping method appears when I try to use guest checkout
I've cleared all caches (server and my browser) as well as toggled these options on/off but it hasn't made any difference. I did at one time have COD enabled as a payment method but I do not know if it was working then or not for guest checkout.