There is no real money AH... yet. Still, with the HUGE influx of weapons flowing the market every day, and a huge supply means lower prices. There is little reason to not take an upgrade whenever you can. The AH beats most of the other ways to upgrade, including vendor and the smith.
The only reason to not try the AH is lack of gold, so you go to the dungeons to get more of it. Sure, you can hope for a nice drop, but if all fails and nothing good drops (which is pretty common) you can always put the gold to use on the AH.
Unless you are talking about the top of the class AAA upgrades, everybody gears insanely fast. The AH also allows targeted searchs so if you want a necklace with Strenght and Vitality, you go and get it instead of waiting one for drop.
Not saying is good or bad, but it's definitely different. When I think in gearing now I think on the AH first, dungeons second. You still run dungeons anyway but I simply don't expect anything useful to drop there.
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