Ebay prosecutes for Shill bidding  

And that is another benefit to sniping...
Curbing retaliatory bidding... by bidders who have no intention of winning / paying for the auction since the bid has exceeded their own price range, and are only bidding out of spite (not "fun").

Retalitory bidding is the whole POINT of the auction process!
My bids have occasionally exceeded what I THOUGHT I was willing to spend; yet I never once weaseled out or even considered doing so. Same is true of the handful of people I know who regularly buy at auctions.
Deadbeats are deadbeats. People who default on their debts aren't some natural byproduct of the auction process.
"Fun"? Is THAT the spirit behind sniping?
What you call "spite", some call good-natured competition.

No sniping
I'm an ebay junkie, and I rarely snipe -- and I often spend more than I set out to. I usually raise my bid sometime in the last day, and then I try to stay away. Watching the final moments will make me blow my budget by an even bigger margin.
Sniping might help people "win," but I try to decide what I'll pay and stick with it. If someone has more money than I do, lucky them.
As for shill bidding, it might be effective to encourage bidding and raise the price a little, but what's the benefit of it if the shill pushes too far and wins?

Back when eBay showed the names of bidders,
I would constantly get overbid by a specific person. (This was on old 78 records, not MCM furnishings.)
I emailed the bidder, and we emailed back and forth and it turned out he was a young collector and a nice guy, so when we were going after the same item, we would emailed each other and the one who wanted it more was usually given a clear path (i.e. if he really wanted, I would often stop[ bidding, and visa versa).
I'm still bidding on rare old 78 records, but now I occasionally find out later that I'm bidding against a collector friend, and our bidding against an unknown bidder results in the item going for much more.
I see no earthly reason why eBay feels it's a security thing to mask the eBay bidder names; in the case of collectables were there's often the same people bidding on the same type of item, it makes it much more difficult and frustrating.

Barry--
The fact that you were colluding with another bidder (when identities were still visible) is one possible reason why identities are now masked.
You say you emailed each other and "the one who wanted it more was given a clear path". What you really meant was that one of you would get it without paying the price it might have achieved had you not colluded. Sure, a sweet system for the two of you, but what about the seller?

Spite
No, I already explained what bidding out of spite is.
And there are a "handful" (or more) of people who do it just the same.
My use of the term "fun" was in reference to "funbidders" commented on previously.
Competition is not the same as retaliation.

Yes, definitely collusion goi...
Yes, definitely collusion going on there with Barry and his buddy. If you did that in a live auction, the auctioneer would be justified in throwing you out.
Hiding the bidders' identities also keeps outside dealers and other Ebay sellers from emailing the bidders and offering them the same item for sale off ebay. This used to happen a lot. I've been buying and selling on ebay for 12 years and used to read complaints about this all the time on the message boards there. It's fee avoidance and Ebay understandably does not allow it.
Shawn-marie, if the shiller ends up with the high bid, he still has the item to resell later with a better idea of what bidders are willing to pay for it.
I have bought hundreds of things on Ebay over the years and have sniped every one of them after losing the first one in a stupid bidding war. It took me that one sale to figure out that sniping was the only way to keep other bidders from inching my price up. Now I sometimes get outsniped by other snipers, but that's ok---I always figure out the most that I'm willing to pay and enter that amount as my snip bid. What I'm willing to pay and what I HOPE to pay are two very different things. If someone's willing to pay more than I am, then he wins. Period.

So what have we learned?
> sniping neatly discourages bidding wars
> bidding wars up the price
> the widespread practice of sniping therefore keeps prices lower

Heh...I read "bidding wars...
Heh...I read "bidding wars up the price" with "wars" being the verb. Funny.
I don't know that sniping keeps prices down so much as it keeps prices from being artificially high. What I've seen both on Ebay and in live auctions are people who get carried away because they have to have the thing no matter what. Some of them want that particular thing and some don't want anyone else to have that particular thing (the second one being more of a chronic problem for people who do it).
Snipe bids, from what I've seen in watching thousands of auctions, tend to be closer to the market value of an item. The more people sniping, the more likely the thing will end at a reasonable market value. Bidding wars, on the other hand, are more likely to drive the price up above market value, which can discourage future buying.
I know of a guy who deals in collectible salt & pepper sets who used to bid prices up on sets all the time on Ebay just to keep the market prices high. Yes, he ended up buying a lot of stuff that he probably didn't want, but in the end I don't think his strategy worked out all that well.
As for sniping, we've all heard wondrous stories of people getting absolute steals with last-second bids. I have plenty of them myself. But what we don't hear about are the zillions of other listings that are sniped by at least two knowledgeable buyers, sometimes many more, that end at fair market value for the item. Those don't make good stories so no one much talks about them.

spanky
I am largely in agreement with your assessments.
As a seller, I have no problem with sniping.
As a buyer, I have no problem with sniping.

There was no intentional collusion
I just didn't want to compete with someone I knew....simple as that. I did not retract any of my bids and my communicating with a friend didn not have anything to do with the other potential bidders.
Jeez...some of you guys sit up on your ivory thrones making inappropriate judgement calls a bit too much. That's one of the problems why this forum is not as fun as it used to be.
I did nothing wrong, feel no guilt, and in my opinion, it worked alot better when i knew the eBay name of the bidders.
Why must you make me feel like I have explain myself and apologize?
C'mon guys...get off your high horses.

Bidding on eBay
I had a buyer recently ask me how to go about getting two different (but compatable) items that I had for sale on eBay that they desired. I gave the answer that was given to me long ago: determine the maximum price you would be willing to pay and then enter that number (as an automtic bid). If no one exceeds that number you win and if not you will get the next one (as there are very few "one-of-a-kind" items offered for sale on eBay). I do the same thing and never regret not winning. I will get the next one!
I also learned years ago that I only have to answer questions not statements.

Me too, barry!
I've backed off on things for a collector friend of mine, too. We're friendly, and I don't want to force her to pay more, especially when I know that she would outbid me.
A few months ago, we both saw a set of jars that we liked, and we both agreed that we wanted just one jar. So she bought them and mailed one to me, and we completely split the cost. It was nice.
Sniping or shilling aside, ebay's taken away those kinds of connections by hiding user names.

Take it from a Powerseller...
When you're a seller,you are everybody's bitch.Ebay ain't what it used to be,to the point of almost not even being worth the effort.It seems everybody thinks the sellers grow rich at the expense of the buyers,but with huge fees,and PayPal's cut,it's the corporate swine reaping all the profits.Ebay should be considered little more than a pleasant diversion,if you could call it that.Why,they even took away a seller's right to give negative feedback!!How ridiculous is that??
I NEVER shill bid on my items,though have occasionally been accused of doing so by bitter runners up who bid too low.Ebay can track the source of bids and if it's the same,they will crack down.I agree on the stat that only one out of every five second chance offers is taken.If you get a non paying bidder,(which is fairly regularly),this is the typical scenario.
Furthermore, I see the pattern emerging where almost every item is sniped,and what with all the (sniping) programs available to buyers,it's a way of life on Ebay.You can have a premium item listed,(Ebay encourages low opening bids to "generate excitement")and have maybe one meagher bid and 25 watchers until about an hour before the listing ends.Even then,the sniping doesn't increase the bid exponentially.I notice bidders nibble away at the highest bid,cautiously upping the bid by $5.00 increments.
So,sorry,if you think the sellers have the advantage,you're wrong-it's the buyers who have everything slanted in their favour.Most of this due to the economy tanking,so Ebay put its iron hand on the rules,and I feel the "bottom feeders" prevail.In fact,I'm sick of sending things to Europe,for ridiculously low winning bids,and then they request regular air mail which is non trackable and non insurable.C'mon,you already got a deal,now you cheap out on postage??? Furthermore, the unscrupulous can falsely claim they never got the item,and who gets to leave negative feedback? Certainly not the evil seller. Anyhow,nuff said-that's my rant on this matter.

OK, good
you know, I really felt better getting that triade off my chest.
I still find things on eBay I would never dream of finding here in town, so it's still aces with me, despite their new rules and fees. The price I usually pay is less than what an antique store charges and no tax.