I put a bid in on a property that was in my own block a while back. Its quite a while ago so the specifics might be hazy, and although you don't need to we used a real estate agency to help put in the bid. There are certain legalities that if you haven't made yourself familiar with the laws could create problems. You will need a bankers check which is as good as cash to present to show you have the funds, but I forget exactly how much of the bid price that was exactly. The auctions are done by the local court, and they have details of all the auctions coming up, I believe most real estate firms have this information, so as a suggestion you might want to talk with one to get more insight.
The property we put a bid in on, there were several bids higher and it ended up going for about the market price. As you noted a lot of these properties are repossessed by the banks and they are really only interested in getting back their money so its not at all unusual to see a home owner very unhappy at the price paid and that might translate to harassment of the new owner, or have the current owner mess the place up by pouring concrete down the drains or something else.
About minimum price, as I recall there is one, and it gets dropped lower and lower each time the property comes up for auction. Again in the case of the property we were trying to get, I think it was the 3rd time round, and the drop had put the minimum price well below market value and a lot of people came out and had a try for it.
Also, as it was in the same place I lived, I was able to get a full story from the guy who runs the community why it was being sold, what the condition of the place was, basically the full story, which in this case wasn't anything particularly fishy going on, no one died inside or anything, nor were their likely to be anyone retaliating for buying their property too cheaply and so on. Again as I recall, you wont be allowed to view the property as it might have all the owners belongings inside, which is another legal issue that in our case the real estate guys would have taken care of.