Coming from my EVO LTE, I always used Auto. It worked very well in any condition, giving just the right amount of brightness (save for being a bit too bright in complete darkness). Battery life was great with it too. It was great to leave it and forget it.
So I tend to gravitate towards auto. However, I've noticed that Auto on the S4 is just a little too dim and not quite aggressive enough. So I'll have to decide on a setting in the future. On the bright side (see what i did thar?), at least it's much easier to toggle brightness with the quick-settings.