Yes, I personally use automatic XML serialization - although I use DataContractSerializer initially brought in because of WCF instead (ability to serialize types without attributes at all is very helpful) as it doesn't embed types in there. Of course, you therefore need to know the type of object you are deserializing when loading back in.
The big problem with that is it's difficult to serialize to attributes as well without implementing IXmlSerializable on the type whose data you might want to be written so, or exposing some other types that the serializer can handle natively.
I guess the biggest gotcha with this is that you can't serialise interfaces automatically, because the DCS wants to be able to construct instances again when it receives the XML back. Standard collection interfaces, however, are supported natively.
All in all, though, I've found the DCS route to be the fastest and most pain-free way.
As an alternative, you could also investigate using Linq to XML to read and write the XML if you want total control - but you'll still have to process types on a member by member basis with this.
I've been looking at that recently (having avoided it like the plague because I couldn't see the point) after having read about it the early access of Jon Skeet's new book. Have to say - I'm most impressed with how easy it makes it to work with XML.