I haven't really purchased anything on Auction House on my Demon Hunter, other than selling off extra rares. However, I started a hardcore Barbarian. Being nervous about hardcore difficulty, which I never tried in D2, I began to purchase rares for all slots on the Auction House.
Rare gear, especially low-level gear is extraordinarily cheap. It must be even cheaper on the normal AH. Since gear doesn't degrade, the supply is huge. As well, because you can only have 10 auctions, the system pushes you to under-price items, in order to maintain turnover. I made the mistake of overpricing my auctions, and now I have a backlog of items just taking up space in my stash while I wait for the auctions for clear.
Outfitting your character through the Auction House really changes the game, at least in the beginning. The difficulty becomes much lower. I'm just rampaging through stuff with my Barbarian, and am really not playing it as if it is hardcore. I play more cautiously and defensively on my softcore Demon Hunter.
Second, in general the items you can buy on the AH are better than the items you are picking up from defeating enemies. That means that a lot of the thrill of getting new items has disappeared from the game. You're picking up items solely to sell them. Then you buy new items from the AH. It's actually rather boring.
I've gotten the Barbarian up to level 11, but I'm sort of at a crossroads as to which which way I want to. Should I go back to the old way of only using gear I find? Should I start a new Barbarian from scratch? Should I continue buying rares? After all, stopping buying rares does increase the chance of death, which is permanent in hardcore mode. Will later difficulty modes be balanced around people purchasing AH gear?
Lots of questions, but no real answers.