Before you fully commit to buying any item be sure that you know the price first! If you found that the item was good value for money and wanted it there and then, you could "buyout" at the asking price. To do this you would select the item you want to buy then click on the "buyout" tab which can be found at the bottom of the auction house window.
The auction house is no different from a real world auction house (in theory), if you decide to bid for an item you can expect that other players will also be bidding as well. You should definitely start bidding as soon as the auction begins though in case you can get out clean with no competition (highly unlikely but you never know).
To bid on an item you'd click on the bid tab which is located near the "buyout" tab. Note, that when you bid Cheap Cigarettes Outlet for any given item, the amount of gold you bidded will automatically taken from your funds, if another player does outbid you then the gold that was deducted will be returned to you in the post, check your mailbox!