I'm voting for the auto-replace because it's faster than scrolling down to hit the reset button. A lot of the time, I start with 3-letter words and just randomly type whatever words look like they work. Between that and typos, I often have to go back and clear words. This way, I could change my mind as I go along.
The only thing I don't like about the highlighting is that it cancels the auto-advance until you fix the problem. Other than that, it is certainly a useful option.
Slotted spoons don't hold much soup. - Stephen Sondheim