I have one of my custom user profiles set up to use Auto ISO with a limit at 1600.
Combined with VR, it has been very valuable for getting hand-held, low-light shots on the fly without worrying about having to bump up the ISO manually when I don't want to use flash.
The only catch is that there have been times when I've forgotten I've incorporated this setting into my U1 profile when shooting with a tripod where I didn't *need* the camera to up the ISO - where I would have preferred a lower ISO and could have easily used a slower shutter speed - but that's not the camera's fault
Different subjects, situations and personal tolerance for noise all play into the choice of what the high ISO limit should be, but for me, 1600 for static shots that don't require cropping is quite tolerable.
Back in the film (and earlier digital days) choosing your ISO was more of a static setting, and you had to work shutter speed and f/stop against that. But now that cameras like the D7000 perform so well at what just a few years ago were ridiculously high ISO values, we essentially have another exposure variable to complement shutter speed and aperture.
If understood well and used properly, Auto ISO can be a very valuable item in the creative toolbox.