The price goes progressively up, displays as such on the charts & live feed, and you can buy from yourself to make the price appear to have risen quickly.
Since the transaction amounts are so small, the Gox fees don't effect you in anyway.
I must admit I've used this a few times to create a couple-dollar rallies. But not with a bot, just manually.
Mt. Gox allows unlimited transactions per day at any specified amount of BTC so that's what's making it possible.
There is no risk of failure either, because you buy the small bids yourself, driving the price up a bit every time.
This. It could also be someone trying to front run a large sell order at 20.19.