This isn't so much a reply to Peter's post... Speaking for myself here, I try and figure out the most I'd happily pay for an item and snipe at that amount. Occasionally, when I think I've got the auction all to myself, I've placed my bid a few minutes early only to find that I'm subsequently outbid. Sometimes I'll go on to place more bids and that just tells me that I'm either (stupidly) too caught up in the "excitement" of the auction or that upon reflection, I in fact valued the item higher than my initial bid.
Only a few moments ago I found myself placing a second bid for £20 after placing a losing bid of £15 that automatically lost to an earlier proxy bid; in the end I won the auction at £16. I saw this same item from the same seller sell last week for £32 - I was very lucky this time and the seller sold for an extra £1, we both won I suppose but upon reflection I really should have bid £20 to start with!
When its me bidding, I think that a proxy would save me money but that's probably owing to one of two possible scenarios:
1. I place my bid too low, I lose the auction and end up spending nothing.
2. The other bidder placed their sniped/proxied bid too low like I usually do and lost the auction to me.
It wasn't until reading the for/against arguments on this forum that realised that sniping is acceptable and I can see how it benefits the seller too so I'm now comfortable with all of this.