Penny auctions are different from live auctions or other Internet auctions in a couple of ways. First, it costs money to bid. Second, when bids are placed in the closing seconds of an auction the amount of time left in the auction is extended. The person who places their bid last when the timer goes to zero is the winner of the auction. This is what allows people to snag such incredible deals via penny auctions, since they may have only placed a couple of bids to win an auction.
There are several different strategies for winning penny auctions and we won't try to go over them all here, but here are a couple of strategies that you may want to try. If you're just starting out a good way to get some wins under your belt is to focus on the lower dollar items and the beginner auctions. These are typically much less competitive than something big, like an iPad 2 for instance. Another option is to watch the auctions for times when there are fewer bidders competing on the site, making it more likely you'll score a big win. Some people prefer to "intimidate" other bidders by constantly bidding on an auction and thus develop a reputation that can scare away rival bidders. Those are just a few examples. Experiment and find the strategy that works the best for you.