Mine sort of works. I can tell it works by putting my finger in front of the light meter and watching whether the device brightens. But the brightness is never where I want it even then, so it's not much use.
Do you use a case that leaves the light meter clear enough to automatically adjust brightness?
With my iPad 1 and 2, touch and iPhone, brightness varies even when set to the apparently same setting across all devices. Goofy. So manual works better for me.