I found this explanation from Net3 Group's website. I thought it explained very well how auto-negotiation can cause problems:
Assume for instance, that a server has a dedicated
point-to-point connection to a switch port and that the server's NIC is set to auto negotiate while the switch is set to 100 Mbps full duplex. If the auto negotiation fails to detect the proper duplex, a server may default to half duplex, causing throughput to be a fraction of 100 Mbps, due to "false collision detection."
While operating in half duplex mode, the receive side of the server's Ethernet connection (connected to one pair of Cat 5 wire) looks for activity while the send side (connected to a different pair) is transmitting a packet. If activity is sensed on the receiver, then the NIC assumes that there is a collision, since on a hub-based Ethernet, you can only have one sender active at any given time. The NIC will back off the transmission and subsequently attempt to retransmit the packet. The NIC's tranmission will be interrupted everytime it receives a packet even though physically, there is no collision or problem with the transmission!
The simple solution is to "hard configure" the server's NIC for full duplex operation. This turns off the collision detection, allowing packets to be
received during transmission. The downside is that you would not want to reconnect the server to a standard hub port since collision detection has
been disabled! In this instance, be sure to change the port back to half duplex.
Hope this helps.
Greg
