Nope, don't like that idea at all.  As a seller, it would mean lots and lots of nibble bids that keep the auction going on, and on, and on, rather than members putting in their maximum either manually or by a snipe.  It would not guarantee a higher price for sellers and may in fact lead to lower prices.  That's okay if you are a buyer, but I think many sellers would move towards Buy-It-Now format.

As a seller, I would hate to have to wait up for hours after the time I decided I wanted my item to end.  I say hours because that could happen if time was extended by 5 minutes each time someone bid.  it wouldn't become an auction where the person prepared to bid and pay the most would necessarily win, it would be the one that could stay up late enough to be the last bidder.

hoges, is your complaint really that you did not win an item you really really wanted and did not have enough time to place just one more bid because of a last second bid?

My advice, and the advice of seasoned eBayers, just bid your maximum.  If it is high enough you will win, if it is not then you wont win . . . . . it really is that simple.  If you want extra time to place just one more bid then you are not bidding your maximum are you?