Mish, you wrote "Ebay will then bid up to the proxy level set by the current highest bidder."
Actually, if the sniper's bid is high enough, eBay will then show a bid amount equivalent to *one bid increment higher* than the proxy level (max bid) set by the *former* high bidder. Otherwise, though, your response on this point was right on target -- eBay treats a bid entered on someone's behalf by AS exactly the same as if the bidder had just performed a manual snipe. And AS *never* bids in increments. It bids one time only, at the time you set and in the total amount you specified.