I agree that Auto Close is a silly option. It potentially causes more headaches than it is worth. Rdb (purchased by Oracle several years ago) has the same goofy feature.
On the other hand, we use Auto Shrink at our site. We have about 40 SQL Server machines with roughly 800 databases spread across them. Most of our Production servers are beefy machines (most with 4 CPUs, some with 8 CPUs), and many of our larger Production databases reside on (high-priced) EMC disk storage. Auto Shrink helps us to conserve disk space. So far, I have only noticed Auto Shrink causing a performance problem on one database in particular--that SQL 7.0 database is heavily updated throughout the day, and we disabled Auto Shrink for it. I haven't noticed any Auto Shrink problems with SQL 2000 at this point.
As long as you recognize the potential problems that Auto Shrink can create, I don't see any problem with trying the feature. If it causes problems, you can always turn it off. Auto Shrink has certainly stopped a lot of disk space-related phone calls on our Development boxes.
Just my 2 cents... Another 48 will buy you a (small) cup of coffee. ;-)