I recently read several guides that advise prospective buyers to bid early and often.  Other than when you are looking to cut off a possible Buy-It-Now by putting in an early bid, I just see no reason to bid early.  Sure, if you're going on vacation, into an important business meeting or will be otherwise unable to bid during the term of an auction by all means get that bid in early.  But in the normal course of regularly watching a particular auction bidding early only sets the price for others and makes you vulnerable to artificial increases in the price.  Here are 2 quick scenarios that very much mitigate against early bidding. 

Scenario #1 - You bid early.  Rival bidder puts in several bids but remains outbid via your proxy.  But now he knows two things he may not have known before:  First, he knows he must bid above a certain minimum to be in the game.  Second, your early bid(s) have established a value of which he might not have been aware.  In the first case rather than guess if anyone is interested, he not only knows that you are, but also can gradually determine your price range by bidding up within his comfort zone. 

Scenario #2 - Prospective bidder is watching an item in which she thinks no one will be particularly interested.  She low-balls with only a minor proxy increase.  Oh, but wait.  There's an early bidder.  Maybe she underestimated interest in this item. She takes it more seriously, works out more carefully her maximum bid and submits a hard thought out proxy.  In this case a person who may (mistakenly) believe an item will not sell and would therefore be less aggressive in bidding, now knows they have competition and will take the auction more seriously.  I cannot tell you how many times I have gotten a great deal on an item simply because there is only a single bidder and I came in at the last minute with a high bid well within the range of a great deal but far more than the current bidder apparently thought anyone would pay. 

Unpleasant Scenario #3 - On the cynical side there is also another drawback to early bidding, specifically to early proxy bidding.  It gives sellers a chance to artificially inrease your bid.  On large items in particular very often there is a nice range and a simple increase of a couple of dollars or even increments of $5-10 can significantly increase the proxy bid you have so conveniently provided early on.  Note that this is particularly common with reserve bids where sellers can artificially elevate legitimate bids with shill bids knowing they can safely bid up to a certain level without committing to buy the item.

Bid early if you must but understand you are just setting the price and notifying others of an item's competitive value to others.