Before eBay I used a site called uBid. They used to extend the auction end time by 60 seconds whenever someone bit to allow time for a counter-offer. They said it was the equivalent of a real auction's "Going for $x... Going... Going... Gone!" which made sense to me. In my opinion eBay should do the same.
That said, eBay does allow you to put in the maximum you're willing to pay, so if you're honest about that about then snipers shouldn't bother you.
I guess the feeling is, if you knew someone was going to outbid you by a dollar (or whatever the smallest increment is), would you have bid one more dollar?
Never a perfect solution I guess, though the idea from the other site you mention sounds like it'd work. If nothing else, it'd make the snipers pay more, as they'd drive their bids up
