I know this is going to generate the usual litany of "too bad, sniping is legit, learn to snipe better" comments (from snipers, most likely) but I'm going to post it anyway :P I also want to head off any comparisons with how things work on, eg, eBay, since that is an auction website, not an AH within an MMO.
Lately I've been noticing a lot of my bids aren't going through, even on items that I find with only a couple hours left and seemingly no bids made (ie bid values at even XX,000 values). I'll put down a bid, even with only maybe 2-3-4 hours (or sometimes even <2 hr) left, go play a little, and the next day log on to find "Auction Outbid" in my mailbox (or see it in my chat, as I'm off questing somewhere). These are non-buyout auctions, so its not just that someone is buying them out. Its one thing if I left an auction with 1+ days and it gets outbid, but when it happens on such short notice, there's nothing I can do about it. And it happens even when I'm already bidding market value on an item; the only explanation is someone is timing the auction to place a winning bid without leaving a chance for anyone else to outbid them.
That's whats really frustrating - not only that I'm being outbid, but that I'm being outbid without a chance to increase my bid.
The AH should support normal gameplay and support the economy. You should not have to "bid against yourself" by always bidding the max you can afford for an item. You should not have to metagame by keeping an auction alt permanently parked by an auctioneer/mailbox just so you can drop in and have a sniping war when an auction is in the last 20 mins, especially if you're busy actually playing the game at the time. It hurts the economy, too, when people subvert the auction system to avoid a normal bidding war for an item, rather than having to actually bid more than someone else is willing to, which gives the seller true market value for their item.
The solutions are simple and proven, and they're seen often in other MMO AHs, so their utility and value should be clear. Proxy bidding is probably the most common solution, though that may be a little more involved to code for DDO. Adding additional time to auctions for last-minute bids...say, an additional 2h for bids made in the last 2h of an auction, or maybe even 6h/6h - would at least give people a decent chance to defend their (honest) bids.