Well, she's probably right about that... I've never heard of it.
Their website is fairly rudimentary, and has a lot of busted links. One busted link is the one for shows and events -- they don't seem to have any currently. That contrasts with any decent registry - their bread and butter is the shows and performance events and they keep those up to date.
I think auctioning off a puppy is a big mistake, and I think a breeder who would do that is certainly an idiot and probably unethical, or at least doesn't care what happens to her pups (and most good breeders DO care - my Lab is 5 years old and I'm still in regular contact with her breeder).
I met a guy in the vet who had won a little Chocolate Lab puppy in a local auction for a private school. Didn't know the first thing about dogs - I bit my tongue and wished him luck. At least he'll get good advice from our vet, who is a good one.