In Diablo 3 there are actually two auction houses, the Real Money Auction House (RMAH) and the Gold Auction House. In the RMAH players will be able to sell their hard earned items for cash, and buy items for cash as well. You can add money to your account through Blizzard, and once it is there you can use it to buy items and pay for monthly subscriptions such as World of Warcraft. Blizzard will take a flat fee on each auction so that the RMAH will only be for highly sought after gear. You will also be able to link your account to a bank account and withdraw money from it, giving players an oppurtunity to make some money from their hours invested in the game. Each currency will have its own seperate auction house and gold will also be for sale by players, making it a real currency with an exchange rate in dollars, euros, etc.
The gold auction house will have all of the items that arent expensive enough for the RMAH as well as the top items. Both auction houses will be fully searchable, even up to the point where you can look for gear that specifically your character needs by searching by stat, class, and slot.
With such a robust market place system players will be sure to find any items they might need in exchange for items they found or money.