Readability of URLs is important. It is not just making the length as short as possible.
If you use a shortened link people can't see what they are clicking through to. In fact this is what most spamers rely on:
http://twb.ly/1uJtUG
Figure: Bad example - You don't know where this is going
When you can, take the more readable option:
http://twibbon.com/join/Scotland
Figure: Better example - this link is sent in the clear as it is short enough
So you should only 'Auto Shorten URLs' when it is too long and you need the space.
However it is becoming more prevalent for the software to support showing the full URL on rollover.

Figure: Good example – the application does the heavy lifting for you