Good subject.
Regardless what other people say.
Pilots ALWAYS flies the airplane, but that does not necessarily mean handflying.
Setting up the autopilot right is an art. Don't be fooled by the "dumbed down" autopilot in FS, in real world it is a bit harder. Why do you think they need all that training? An aircaft can be flown in many different ways, the hard thing is to figure out which mode is best suitable at the moment. Some arrivals are better off flying in Heading select rather than lnav.

When to engage the autopilot is at the pilot's discretion. Takeoffs are never automated, they have to be flown manually, but all other phases of the flight can be managed by the autopilot.

When climbing thru 10.000ft, I'd say 99.9% of all airliners are flown in LNAV and VNAV (or corresponding autoflight modes) in conjunction with autothrottle.
This ensures that the flight is flown in an economical manner (all the speeds and climb profiles are calculated by the FMC unless you manually put in some restrictions)
Nowadays pilots are more of a system monitor, their destiny is linked through the FMC, the very heart of the aircraft. The purpose of the autopilot is to reduce the workload, less fatigue pilots are always better, and that is very crucial in tight airspace, an error there can lead to fatal disasters.
I will quote myself from another thread : Automated flight should be a supplement to the pilots, not a substitute. 

So NO, you are not cheating 

Okay, I'll give you every function of the 737NG autopilot. The Flight mode announciations are displayed on the PFD.

We start off with Autothrottle modes:
ARM (displayed in white color)

Next we have pitch modes:

Roll modes
A/P status:


Here's a good picture of a real 737 MCP panel
http://www.airliners.net/open.file/597933/L

Granted all functions are not available during every stage of the flight of course, but still, you have some options to choose from here. And keep in mind that FS has left out half of the autopilot managing by leaving out the FMC. Many parameters are set in the flight management computer.

It's up to the pilot flying if he wants to do an autoland, but if weather is fine they usually land manually, but loc capture is often done in autoflight, then they simply disengage the autopilot and fly it manually from there.

Boeing has it's own takeoff mode, called TO/GA.

Before doing any of this, make sure both engine generators are turned ON (A/T wont work unless), and OAT is entered in the FMC. FD switch should be ON and A/T armed.


You engage the takeoff mode during take off roll,  by pressing a button on the thrustlever (actually there is a button for each lever -both can engage TOGA).
When you do, Autothrottle goes to takeoff power (N1), set by FMC
After 60kts FD commands 15degree nose-up pitch
At 84kts THR HOLD is announciates as Autothrottle mode.

Roll mode is HDG SEL until 400ft RA, then you can choose other modes such as LNAV.15 degree nose-up is commanded until sufficient climb rate is established, then pitch is commanded to V2+20 (always set V2 as your MCP speed prior to lift-off)




THR HOLD is de-activated at 800ft, goes into armed mode (usually followed by N1). Now is the time to start the flap retraction schedule. I always engage VNAV in clean config, just a habit I have, speed is set at 250kts automaticly.


Climb speed is determined by the FMC, but it always commands 250kts below 10.000ft, after that it can vary. I've had everything from 284 to 315kts. It's a factor of weight and cost index, temperature yadda yadda, let's engage the autopilot  


Airbus and Boeing has a different philosophy, but "managed" modes for the Boeings would be LNAV for lateral track, VNAV for BOTH vertical profile and SPEED during the cruise phase.. Since the FMC calculates your speed in the vertical profile, the autothrottle will go into FMC SPD when the aircraft reaches Top of climb, prior to that A/T will be in N1 mode and VNAV will read "VNAV SPD"  

Clearer?

A very interesting post =- thanks guys.........