auth is an instance of Auth that you have defined in your model. Auth 
happens to have a __call__ method so auth will be callable like a function.

When called auth uses the first argument (request.args(0)) to get the 
correct user function (login, register, etc) from Auth using getattr and 
returns its result, these return similar enough results (mostly just a 
form) that they can all use the same view in default/user.html.

If you want to understand more see:
https://github.com/web2py/web2py/blob/master/gluon/tools.py#L1584

-- 
Resources:
- http://web2py.com
- http://web2py.com/book (Documentation)
- http://github.com/web2py/web2py (Source code)
- https://code.google.com/p/web2py/issues/list (Report Issues)
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