We're led to believe anything automatic is for beginners, and hard core pros go manual all the way. Well, I've news for you - that's just plain nonsense, here's why...
Quick Background: I have been using Auto-ISO heavily for almost a year, having had it turned off for the first year or so, believing it to be an evil curse by some sadistic nikon witch. Since then, I have really begun to understand and appreciate its benefits, though I still see people calling it nasty names, just like I once did,.. so here are a few thoughts before you make up your mind...
So, we're all familiar with the usual Auto, Program, Aperture, Shutter and Manual modes on our cameras, which allow us to decide what we control directly, and what we let the camera decide for us, and also we're no doubt familiar with the Exposure Triangle that these settings essentially influence to correctly expose the image.
Well, the common supposition is that automatic modes "AUTO" and "P" are for beginners that don't know how to use their camera, and "A" and "S" (or "Tv" for the oddball Canon users :-) are for the amateurs, with "M" being the real pro's choice. The foundation of this belief seems to be a two parter - firstly, if you're a pro, you want to control everything 'just so' because, well, you're bad ass like that; and secondly, if you're a beginner, you simply can't use the more advanced modes because you don't know how. Maybe there's an element of truth to that last part, but the former is just nonsense, and a little narrow minded.
Now, as these modes essentially control the aperture size, shutter speed and ISO setting, we consider them one and the same in terms of automation vs. control tradeoffs. Also, ISO is a real killer for image quality if set too high, so is the least preferable of these to change and becomes something you want to keep low, sometimes trading off a bit of exposure (that can be improved in post) for a lower ISO. This makes sense from an image quality point of view, but the question is - does this really work in practice? And why did Nikon increase the functionality around AUTO-ISO in the latest pro body releases - the D800 and D4? I doubt these are designed for the 'beginner' market.
Not everyone shoots the same things, in the same ways, with the same circumstances. This leads to (as usual with photography) plenty of tradeoffs because of the different requirements.
If we look at a few factors that influence your choice of these key settings, we can then identify when Auto-ISO actually makes a lot of sense.
Clearly there is a theme here - is the scene fixed (completely static, no variation), controlled (some variation, but you can control things), or freeform (you are merely an observer, stuff is happening and you have no control over it).
Shooting in a fixed environment, like a studio, means you have 100% control of the light, environment and subject - and the subject is likely not moving. This gives you more options with shutter speed, allowing you to keep ISO at a minimum and adjust aperture for creativity (or vice versa with the Shutter speed).
Shooting in a controlled environment, like a model photo shoot at the beach, means that some things will be moving, changing and whatnot (like the model, waves, daylight), but you can control a bunch of other stuff to counteract that (flash, reflectors, tripods etc), meaning you can again minimise ISO and focus on shutter and aperture for creative effects and balancing the exposure.
Shooting in a freeform environment, like the street, war zone, protest, whilst travelling, means you have little to no control over the scene, or the subjects, and have to deal with what you get. This could mean a crappy time of day, dark alleyways turning into bright streets, artificial light changing into natural light and back again within a few metres. It is also likely that this stuff is happening fast, and you can't ask everyone on the street to stop for a second whilst you workout the right exposure because a dark cloud just covered the sun, or the protesters walked down a dark alley, etc.
Of course you could argue that a pro can assess light conditions and change settings really quickly, but I have to ask - why would they want to? and that fast, really? It is more likely that they will check the light meter on the camera to see if the exposure setting would be right anyway.. in which case you may as well just let the camera get to that point automatically then compensate for personal choice.
I shoot a variety of things, including some studio type stuff, some urbex, some landscapes and some street stuff (especially whilst travelling).
Here are two very different situations to compare when and when not to use AutoISO:
For travel photography where the focus is street life, people, culture, etc, then you absolutely should be using Auto ISO - seriously, you are going to miss shots if you're faffing around with that in all the hustle and bustle. I will also normally use Aperture priority mode for DOF control purposes, but will also flip to Shutter priority when I want some motion (or not).
For urbex shots, where you are often photographing fixed objects in low light, you definitely do NOT want auto ISO - you have more time to set-up shots, and usually have a tripod - and quite often are doing HDR, which will punish you mercilessly if you have nasty noisy images - so make sure you turn it off for these types of environments, and in my opinion, these are the circumstances when full manual is the correct mode (99% of the time anyway).
Auto ISO allows you to give the control over ISO to the camera by default, and change it when you feel it is necessary (exposure compensation or directly changing the setting whilst shooting, though that is rare). This allows you to focus on whichever creative aspect you need (shutter speed or aperture size) to get the correct exposure, whilst doing the many other things whilst composing and executing a shot. It requires a bit of set-up and forethought though, but once it is set, it can make your shooting a much easier experience.
(Sorry, I only know about setting it up on Nikons - the D300s and D90 had more basic implementations, but roughly the same idea; Canons have a similar setting, but sadly it is not as feature rich as the Nikons :-/ )
You will need to turn it on in the menus, then set a maximum ISO and minimum shutter setting. The maximum setting is the highest ISO the camera will use in a given situation (so you can set an 'acceptable' ISO maximum - the highest settings possible tend to be quite noisy), the minimum is the lowest shutter speed (when to start increasing ISO) to avoid motion blur from natural hand shaking etc.
This means that the camera will change Aperture or Shutter depending on mode until the point it needs more light AND it has hit the minimum shutter speed barrier, then it will increase the ISO up to the maximum you have set. Great!
The problem with this, is that when you change lenses or focal lengths, that minimum shutter speed requirement will change (1/focal distance = min shutter speed.. in theory), and even then, sometimes you want it to be higher than this in general, because you're in an environment with lots of vibrations (boats, trains, cars, etc), or have a sensor that will show up the slightest of movements in the detail (D800 36mp...:-) Well, Nikon have included an "AUTO" minimum setting, with an adjuster for "faster" as well as for "slower" (if you can handhold like a tripod!). This makes the settings here almost perfect... but sometimes you want an ABSOLUTE minimum shutter setting - when I shoot a 24mm I don't want 1/20th minimum shutter speed, as this will still create motion blur in the details - I want 1/60th as an absolute minimum, for example.
OK, so this is not a setting for ALL your photography (what is?), but in those situations where it is important (street and travel photography, photojournalism etc), then NOT using this can lead to you missing a lot of shots - either from poor exposure, or simply missing the moment. In these situations, you really should use AutoISO, or risk losing that shot...