I had not been educated about this system, even though an explanation was available (but relatively hidden) in an AH FAQ on the official Battle.net support site. So here's what I saw BEFORE I became enlightened: I find a cool piece of gear at a more than reasonable bid. I place an incremental bid on the item, not knowing someone has placed a max bid. My incremental bid is NOT accepted because it is too low. Every attempt I make to increase the bid is met with the same "too low" rejection. I wait a few minutes to see if I just happen to be bidding against someone who is really quick on the bid button. I see no changes, so I bid again, but again I'm too low. Welcome to the beauty (and frustration) of the max bid system. You can keep outbidding people on an item WITHOUT being in the auction house and babysitting your item. But for those unfamiliar with this feature, it can be confusing and discouraging. The Diablo III forums have numerous threads from players wondering why their bids are being instantly rejected as too low. It also is radically different from the World of Warcraft auction house experience, so you can't assume both work the same way. This also becomes a great way for sellers with more than one account to drive up the price of their own items, or buyers to make sure they are in the bidding until the bitter end, without going too high. I can't say I'm a fan of the system, especially since it took a bit of research to find out what was happening. People who don't frequent the forums or read FAQ's will get frustrated. But I can see its merits. Now I'll just have to wait for the novelty of the RMAH to wear off so that items being sold for gold come down to a more reasonable price. Hopefully the 1.0.3 patch changes that hit today will help.
The auction house prices are a bit out of control