A few questions:
(1) When you navigate to SETUP > Day/Night Mode and select "Auto", did you click "Save Settings"?
(2) If you log out and then log back into the web interface and visit the SETUP > Day/Night Mode page, is the value still set to "Auto"?
(3) Is the image in color or black and white?
(4) If you place the camera in a pitch black room, is there any image?