Yes, the cash auction house is optional. But it's not a very good option.

Rob Pardo's Diablo 3 presentation during the Activision Blizzard Analyst Day event shared some insight into their philosophy surrounding the Real Money Auction House.

Here's what he said (jump to the 2h 15min mark) during his presentation:

"We really thought carefully about how we were going to design this."

"..the reason we're doing a listing fee in the first place is because we don't want every item possible to end up on the Auction House."

"..there's going to be lots and lots of items in the game that players aren't just going to find or going to be valuable enough to spend real world money on. We really feel that it's important that the (Cash) Auction House is the place you go for valuable items."

"The things up on the (Cash) Auction house are the things players should be willing to spend money on. We feel that the listing fee really achieves that."

Earlier in his presentation, he also talked about how the Real Money Auction House is a trading game where players can obtain really hard to get items. He said that there's a difference between World of Warcraft (an "Achiever Economy" where all bosses drop the same items and can be obtained by any player) and Diablo 3 (where it's instead "Merchant Item" based and no amount of skill or time can give you the random rolls you want.) So in contrast to WoW, the really hard to get items will only be available on the Auction House.

And then they have the free listings per week. They want players to use the Cash Auction House, and Rob said that the free listing is a great way to get players interested in the real money service. Paraphrased: "They're unsure about using it.. then BOOM, you get a really powerful item. I know this is a valuable item, so I'll try and put it on the (cash) auction house for the first time. If that item sells, it's a great way to get people introduced to the (cash) auction house." You can hear his exact example at the approximate 2:15:51 mark.

Both Gold and Cash is shared amongst all of your characters. That's right; your shared stash isn't needed to share Gold, all of the Gold you're carrying is automatically shared with all of your characters. Their intention is clear when it comes to trading and item sales.

Basically;

* Blizzard really wants you to use the Cash Auction House. There are incentives in place to get you using it regularly.
* There are so many items out there and random drops from bosses, that the items you want will be practically impossible to get on your own. You HAVE to rely on the Cash Auction House to obtain it.
* The Cash Auction House is where you go for valuable items. The Garbage.. I mean, Gold Auction House is where you go for everything else.
* You have to use Real Money to get the really powerful Diablo 3 items. (That's the plan.)

If you're happy with the minimum, then you'll be very be very pleased using the Gold Auction House. But if you want valuable items and the best gear, then you'll have to use the Cash Auction House.

The game is all about character development and improving upon yourself, and human nature drives us to create uber powerful characters and compete. So, this system is practically forcing players into the Cash Auction House. It's the only way to advance.

I don't feel one way or another about this system, I just think it will be interesting to see how players will react to it when it's live.. but I just don't want you surprised when you find out the items you need to advance will only be available for real money.