This happens a lot...

Note*** All bids are done by proxy. When you enter the maximum amount you are willing to pay, automatic bids will be placed for you up to your maximum amount. Using proxy bidding, you can win the item at the lowest possible price. Your maximum bid is only placed when a competing bidder bids the same amount.

Please note that if the current high bidder's maximum bid is higher than the bid you place, you are immediately outbid because your bid is not high enough to beat the earlier maximum bid.

Remember: Proxy bidding will be automatically bid up to your maximum. In order to avoid being outbid, you must have the highest maximum bid. Also, if another bidder placed a higher maximum bid, your bid will increase to your maximum bid because proxy bidding bids on your behalf up to your maximum bid.

Let me add an example. If you bid on an auction that has no prior bids, and you bid 1000 gold, then the system will only use as much gold as is needed to "win" the auction at that time. That would mean 10 gold if there is no reserve price. So your bid shows up as 10 gold, but you actually bid 1000 gold, right? Now another user comes and bids 20 gold. Then the system will use more of your bid amount and bump your bid up to 30 gold. That continues until your maximum bid has been used up. I hope that clarifies it a bit.