What is the best way to exchange MTGUSD to USD?
You can sell MTGUSD directly at bitcoin-otc or at bitcointalk. If you deal with reputable members, the risk of a receiving a chargeback is minimal.
Note that you don't need to register at bitcoin-otc to do this. Just drop by the channel and announce that you are selling.

Bitinstant used to have paypal withdrawals, but they aren't working at the moment.