This article is from the eBay FAQ, by William B. Shaw email@example.com with numerous contributions by others.
It's extremely frustrating to see yourself as the highest bidder for the
duration of an auction and lose to someone who crawled out of the woodwork
at the last minute. Novice bidders, who don't understand the proxy bidding
system, are particularly prone to being successfully sniped. This is the
type of bidder who bids repeatedly on an auction to get one step ahead of
the next bidder. Many bidders feel quite helpless in the face of sniper
activity and don't know what they could have done to prevent being sniped.