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How E-Junkie goes about calculating postage using weight (oz), zipcode and items maximum per package. Does it, for example, look at what the combined weight of the package is - or does it first figure out how many items can go into a specific container?

We use a hybrid method. We do not calculate the shipping cost by taking the whole weight as one big package but we don't calculate the cost of each individual container either. We calculate the number of containers required based on the container capacity you specify while adding/editing the product. Then we take the average weight of a container, calculate the shipping cost for it and multiply it by number of containers.

I noticed when calculating the postage on an individual item, the postage from E-Junkie was 100% correct (according to that calculated by USPS) - but when we added the same, two individual items together, the postage was higher than it should have been.

That will depend on your container capacity you specified in your product settings and your container weight and cost in Admin > Shipping Settings.

I can relate to some of the concerns that the OP brings up.

What I would like to see on e-junkie that I think would help tremendously is the ability to define not only how many products fit in each container, but also how many containers fit inside each other.

I know that it can be done - right now there is only options for small med and large "tubes". However, if you have more than just 3 standardized shipping containers, I think you can see how this can only be mildy effective.

For example I would like to specify that 3 small envelopes can fit into 1 large envelope. 2 large envelopes can fit into a small box. 4 small boxes can fit into 1 large box and so on.

I know that with shipping calculation you do your best estimate to arrive at a determined shipping price, but I think that being able to organize your containers would be a very powerful tool for many sellers.

We always try to strike a balance between features and additional clutter and complexity it brings to the interface. E-junkie's selling point is it's ease of use.

So although what you suggest is great, we do not want to make a too complex shipping system.