The extrusion width setting is one of the most important and at the same time one of the most poorly documented settings.
BaronWilliams did a good job of trying to explain this a few messages back, but unfortunately I think he may have presented too much information at once.
I think simply renaming this setting would go a long way towards eliminating some of the confusion.
The setting would be more aptly named "extrusion path spacing" or something like that. When people see a setting named extrusion width, the first instinct is to think that it somehow controls the width of the extrusion of plastic. It absolutely DOES NOT. The width of the extruded plastic is controlled by the extrusion rate.
I've run into more than one person who was confused by the "auto" setting. ( I was at first too). It doesn't seem to make sense to set a 0.4mm nozzle to squirt out 0.48mm of plastic. What people don't often understand is that already happens - despite the extrusion width setting. The extrusion width setting is simply a way of COMPENSATING for the squishing of filament from a round column of filament into a wider flattened oval.
By compensating for the squish, inside and outside tolerances can be much more accurate. The difference is really noticeable on small inside dimensions such as holes and slots. By allowing the slicer to compensate for the squish, your holes will come out being much more accurate, instead of always being undersized. If you have the nozzle size and the extrusion width setting set the same, the slicer can not generate a tool-path that takes into account the true width of the extruded plastic on the surface of the part. For those familiar with CNC machining, this is a lot like setting the cutter radius compensation incorrectly.