I think all school systems should disable auto-correct on their computers, and all students should too.
I think auto-correct is actually the root cause of why we have a lot of poor spellers in the US. People don't realize that they're spelling incorrectly because the only thing that knows they're spelling correctly often auto fixes it.
I used to think I was a good speller, until I started using Adium (an OS X chat client). Adium tells me when I spell something incorrectly by underlining it.
I then decided to disable auto-correct in Word. I now am learning how 'ridiculous' is actually spelt.
That reminds me, why do I have to go to a program with spell checking to write out my blog posts, instead of Firefox having integrated spell checking in all text areas? What about Blogger offering spell checking?
Wikipedia is a prime example of this: most articles I've found have at least a few misspellings. They need interactive spell correction in order to help gain more credibility.