What's shill bidding?  It's when you--or you have someone else--bid on your eBay listing to drive the price up.  Whether you're only trying to build excitement by forcing activity or you're trying make other bidders top the bid you put in, it's against eBay policy for sellers to artificially increase the bid. 
 
It's the seller's responsibility to be aware of the policies that eBay requires you follow.  Violation of polices can result include listing cancellation, loss of eBay fees on cancelled listings, loss of PowerSeller status, and account suspension.
 
Matt Halprin, Vice President, Global Marketplace Policy, Steve Oglethorpe, Senior Marketplace Policy Manager, and Scott Whipps, Manager of Business Development will be conducting an online workshop on eBay's Shill Bidding policy on Tuesday, August 16th at 14:00 PDT.
 
 
Here is the original announcement:
  
July 18, 2005 | 05:14PM PST/PT
 
Hi . I'm Steve Oglethorpe, Senior Marketplace Policy Manager.

Shill Bidding is bidding that artificially increases an item's price or apparent desirability. It includes bidding by individuals with a level of access to information about the seller's item not available to the general Community. Shill Bidding unfairly manipulates item prices and undermines trust in the marketplace, and is prohibited on eBay.

Today, we are announcing some clarifications to the Shill Bidding policy [http://pages.ebay.com/help/policies/seller-shill-bidding.html?ssPageName=CMDV:AB] to reduce confusion about what constitutes Shill Bidding, specifically as it pertains to bidding by a seller's family members, roommates, or employees on that seller's items.

Because a seller's family members, roommates, and employees have a level of access to information about the seller's items which is not available to the general Community, they are not permitted to bid on items offered by the seller--even if their sole intent is to purchase the item.

Family members, roommates, and employees may purchase items from a seller without violating this policy simply by using fixed price purchase options that do not involve bidding. These fixed price purchase options include Buy It Now [http://pages.ebay.com/help/buy/buyer-bin.html?ssPageName=CMDV:AB] or purchasing from the seller's eBay Stores.
http://stores.ebay.com/_W0QQsspagenameZCMDVQ3aABQQtZlw

We strongly encourage sellers to ensure that their family members, employees, and roommates are aware of this policy and of the possible consequences of violation.

Members who violate the Shill Bidding policy face a range of actions including listing cancellation, loss of eBay fees on cancelled listings, loss of PowerSeller status, and account suspension.

For more information and examples, please review our Shill Bidding policy [http://pages.ebay.com/help/policies/seller-shill-bidding.html?ssPageName=CMDV:AB] and other marketplace policies.
http://pages.ebay.com/help/policies/index.html?ssPageName=CMDV:AB