OK, here we go, shill bidding in a nutshell:
I have an item I wish to sell for, say, 40 quid.
I put it in auction with a reserve of, say, 30 quid ('cos I can't be arsed with timewasters - that's why).
The auction gets to 40 quid.
I get a mate to bid 45.
a) Someone bids 50, they win, they're happy, I make 10 quid more than I wanted in the first place.
b) Nobody bids above 45. I get to keep / relist / resell the item. *I CANNOT LOSE*.
Repeat 'til fade.....
The whole point of an auction is to sell at the highest bid price. Shill bidding perverts this process. In scenario (a) above, someone just got conned out of ten quid (think about it). In scenario (b) I get to fight another day and con some other poor sap out of ten quid.