And once again, please understand that in order to get a bid in, the winner only needed to bid the minimum 25 increment your SHOWN BID (which was 1275, i.e. the BID DISCLOSED TO EVERYONE ON EBAY) NOT your max bid. THEN, in order to win, he only needed to bid a penny more than your max bid.
Please see http://pages.ebay.com/help/buy/bid-increments.html
"Note: A bidder may be outbid by less than a full increment. This would happen if the winning bidder's maximum bid beats the second highest maximum by an amount less than the full increment."
Panth, I've outbid people, and been outbid, in precisely the way you been describing. The ONLY unusual thing about your situation was that, according to what you seem to have been told, the winning bidder's max bid 1325 but his price was not bumped up to that max amount. [But really, he did beat you fair and square] [<--edit: I realize now this is not your issue, so pls disregard this] --[and precisely the way we snipers would LIKE TO win all the time: by less than the full increment over the next-best bid, and ideally by just one penny over the next best bid] [<--edit: this is inaccurate: we want to win at the lowest possible price and so obviously would rather win with e.g. a max bid of 1301.02 but final price of 1225 over a next best bid of 1200, rather than win with a max bid of 1301.02 with a final price of 1301.02 over a next best bid of 1301.01].... Good luck