In other MMOs I've played, auction houses were useful not only as a place to sell your stuff via the in-game systems, but to stand around and meet people, trade items face-to-face, discuss trade or the in game economy, and stuff like that.
There are plenty of people in Glitch who would enjoy such a thing. Besides, it would give a good explanation of how the auction system works in terms of the game world.
There was an earlier suggestion that the frog mailmen's dojo or training-facility be part of the world. This would also be a good place to put an in-world auction house.