Personally think this is completely unneccesary. Our school has done it but it's always junk that gets thrown away. I think parents will appreciate that the auction chairs are sensitive to the budget and are environmentally conscious - I think that favors are getting carried away. It's not a wedding.
I love the idea of the photographs- think we may need to steal that.
What our PTG does is not have individual favors but instead have a centerpiece that ties into the theme and is a take home- we make a game out of who at each table gets to win the centerpiece. One year we did dots under plates, another year we did musical chairs and we've also done a trivia contest when we our theme was the 60's. It's a little extra money but we find that it warm up the crowd and creates a fun atmosphere. When we are looking for parent donations for the auction we also say that if you don't want to donate an item you can make a money contribution. Some of that money goes to buying the stuff for the centerpieces. We have also had some success in getting places to donate items. Good luck and have fun.
I personally think it's a waste of money and just another "thing" to clutter up people's homes. We run our auction on a shoestring in the school's gym. If yours is a fancier one, what about a photo booth, or photographer roaming to take photos? You could give those as "favors", or if money is an issue, post the pictures online at Snapfish or Kodak and allow people to purchase the photos, if they want.
Do you do favors for everyone at your auction? We are split between the cost of the favors being a waste of money and it being worth it for the "touch" Thanks!