The Natrium Bag of Discount, an item which give you 5% off on bids.
The Necromancer class, which can resurrect dead auctions, and kill top bids (with a 15m cooldown timer).
The Tamer, which can invoke pet-bots that automatically bid $0.25 each.
I really think you're onto something here derefr... a system that gives you the possibily for real life money manipulation, self-loop'ed into skill/item progression!
If I could write something in a week, its an interesting idea in social psychology that I'd love to play around with. It's not just the money -- it's finding out what would work and what wouldn't. It'd be a fascinating exploration of the human mind.
Would people do this with real money for virtual goods? Would they trade things that would have more monetary value later for things that have less monetary value now? Could you just write an app that had people pushing a button for "free" cash? Is there a tie-in to social networks? Could you tie it into the iPod, or an addictive game? with the right combination, the whole thing could go viral.
The idea of "cheating" people doesn't interest me -- If I did something like that I'd be clear about this being for entertainment value only and I'd even support limits on the amount of play per day. It's just the rest of the man-machine interaction that's so cool here. Are the people somehow "broken" and the machine is taking advantage of them? Or is this just entertainment, no more different than going to Vegas for a weekend?
I was pondering variations on Swoopo, and think I went and made it even worse: I would cross it with an MMORPG.