Automatic proxy detection, to make a long story short, is a protocol that allows the browser to automatically retrieve proxy settings when the computer is behind a coporate network/proxy server. It is a fairly complicated protocol that utilizes bits and pieces of DHCP, DNS, and a web server. This is meant for businesses where there are a large number of machines behind a proxy server and they have all the above mentioned services in place. For the ordinary home user it doesn't mean anything. When automatic proxy detection fails, it reverts to no proxy settings. The drawback of using that option is just a little longer wait time for "automatic detection" to fail when you start your browser every so often.
The best option to set it to is NO proxy server. Unless, ofcourse, you are actually behind a proxy server. The automatic setting is great for corporate networks where laptops are coming and going and where people might want to take a computer home and have it work at home as well as at work without having to change settings everytime.
The automatic setting will cause no ill effects for the home user unless there are specific settings/servers in place on the network to respond to such a request.
I'm sitting on the sidelines learning on this one too.
My understanding of these browser settings is elementary.
My suggestion was more "intuitive" than "technical".
The daughter had recently moved physically, whereupon the machine's internet access was failing when connected to a known-good internet connection that other known-good machines were able to connect successfully. Presumably it was connecting successfully at the previous location.
Therefore, I wanted to rule-out any strict proxy setting that may have been in place at the previous physical location with the previous ISP or server settings that may still exist in the browser settings.
Auto-Detect seemed like the "safe bet".
I was aware that Auto-detect would be "slower" than leaving the options "unchecked", but decided to recommend for Auto-detect anyway because it was something that the OP could affirmatively "do" as compared to visually inspecting that something was "not set".
I did not know that Auto-detect would eventually "fail" and revert to no settings if the various proxies were not resolvable.
I had to go read to discover that.
I sorta believed Auto-detect would try and then move on to the next solution until it found one.
Here's my IE LAN settings in which I do leave the items "unchecked".
Again, my plan was to make sure that some bogus proxy was not the reason for failure.