I have had the same problem. I enter the proper title where the title should go in the editor, and if I click to "view post", I see "Auto Draft" as the displayed title of the post. This has only happened since the upgrade from WP 2.9 to WP3. Before we blame WP, I had also attempted to upgrade atahualpa to the latest version, and the transition was a disaster. Fonts were bad, colors were gone... just a mess. I had to revert back to the previous version of atahualpa.
But now I get this "Auto Draft" problem. A temporary fix to get the titles back was to go down to "Atahualpa Post Options" every time I did a new post, and delete the phrase "Auto Draft", making the field blank. After I wrote my post, I would save it, and I get proper titles. But keep in mind, I have to do this now for EVERY post. This is a real nuisance.
If there is a fix for this, I am willing to edit any necessary PHP code to get this to stop. My blog is at http://sj.foodsci.info