Does anyone out there do ACH transactions to or from Canada?? We have a customer that wants us to set up for direct deposit to Canada for him. We have checked with Fed and there is a service for this, but I am looking for someone who does this that can let me know the good and bads of this program? Can anyone out there share their experience?????

One thing you will need to consider: Do you have a means of checking the names of the recipients against the OFAC list? For cross-border ACH payments, that responsibility falls on the ODFI.

Although the situation you are describing implies that the recipient will be your own customer, once you are set up to process ACH payments bound for Canada it is technically possible that other customers for whom you originate ACH could, without your advance knowledge, include cross-border payments in their files.

What are the fees like for performing international ACHs? I am most worried about the currency differences, but from what everything I can read, if it comes from the US, then it is exchanged in US currency demoniation..........is this also what you know?

From where I sit in the bank, I don't see that side.

If you haven't already done so, you might want to take a look at the brochure for FedACH international services:
http://www.frbservices.org/Retail/pdf/FedACHPS.pdf