It seems to me that tt2 and Meg show that this issue is, in fact, mildly relevant...
In the newest iTunes version this Automatically Add To iTunes appears to function as a gateway whereby content can be monitored. Certain video files cannot be loaded, etc. This function seems to me to have no real value to the user, as tt2's answer clearly shows. It is redundant at best. I suppose I'm not surprised because iTunes is not just a player, but a distributor of content (=$). Think of iTunes as a CD player and a Record Company combined. Ugh.... Just check the history of big companies distributing music. "Welcome to the jungle, it gets worse here everyday..." When you can't, by any means available, delete a redundant function that is advertised as an improvement, heads up folks!
But, more importantly, this notion of Auto Add violates the principle that content on your personal computer is determined by YOU, not by Apple (or Warner Bros or Geffen or Disney or MCA...) Meg shows apathy about it. So be it. This thread is not for her. I'm crushed. And, btw, responding to a dead discussion to say it's dead... I don't get it.
But tt2 proves my point: this is a designed behavior... that cannot be disabled. I suppose I've already connected the dots.
"Thou dost protest too much."
all the best