Yep Nash, it always sets your bid to the next highest incriment, regardless of what you bid. You could bid $1,000, and it would still just kick the bid up by one incriment. Also, if you bid once, and then decide you'd like to up your bid, you can bid again - provided no one else has bid on the item since your initial bid, the price won't go up at all.
Now, if you find something that you really want to purchase on ebay, I say the best course of action is to snipe it. That means bidding on the item at the last second, so as not to give anyone else the opportunity to bid after you. I treat it the same as any other bid. I bid as much as I'm willing to spend, and just bid that amt in the last few minutes/seconds of the auction. If you can't be there toward the close of the auction, you can use a service called esnipe -
http://www.esnipe.com - to make the bid for you.
And like Muck said...ALWAYS check the shipping. It really can get rediculous.
SOB
BTW...For Car audio stuff stay away from seller id "Scala1", aka IkeSound. I purchased my car stereo from this guy...the deck was new, but was defective on arrival. Three calls to his 800 # later (he wouldn't accept email correspondence after the sale) and not a peep from him. I left him negative feedback, and then got negative feedback from the sh*thead. Fortunately, I got the deck repaired at no cost through a Pioneer authorized service dealer.