i'm a no-aids guy, i like the challenge, it makes it more realistic and promotes me to drive better... not to mention, being decent at the game without driving aids makes you simply incredible when it comes to using driving aids, i.e. when your mates who don't have the game force you to use them in 2 player!
i use manual every time and have absolutely everything at 0 or off (apart from ABS which i have set at 1)
automatic gives you no involvement if you ask me; all you do is brake, accelerate, turn, brake, accelerate, turn! having to change up and down ratios yourself adds a whole new dimension of responsibility to your game and makes you feel so much more 'connected' to the racing
still using a Sixaxis controller though

! waiting for the HKS Racing Controller to come out.... i've no place in my bedroom for a wheel
EDIT: just as mentioned above, it becomes second nature. it really isn't that hard; two or three laps of a circuit allows you to remember what gear you need to be in for each corner, and from there, it's just a matter of keeping yourself in the right gear!