It's so strange to me that there's so much talk of picking "trash" factions no one would ever want in this thread... The whole reason I like auctions is because I can pick a faction that's enjoyable to play but would never win otherwise, and actually have a chance with them. I want the opportunity to play Lantids without feeling at a disadvantage the whole time, want to have games where it's not just Itars Ivits and Ambas again, etc...
It would only work for experienced players, but it could be an interesting format if instead of having an auction, the last player assigned values to each of the four selected factions-- similar to rotating sectors to balance the options as well as possible. It would speed up the auction process (which is almost unusable in 4p games), and it makes everything a known quantity upfront rather than the poker-style bidding game some people mention... (It would put a lot of burden on the last player though)