If you have the brightness set to max, the light sensor seems to be ignored. So set the brightness below max and it should automatically adjust brightness.
As other users have pointed out, the light sensor does adjust screen brightness depending on ambient light, but there is a delay of a couple of seconds.
The other thing it does is activation of the backlight on the keyboard. So in bright light the backlight is off, and it comes on in dim lighting.
I have also installed Simple Brightness Applet (good app!) which is useful for changing the screen brightness in large steps. This control is normally hidden in the settings menu. It doesn't disable the ALS since the ALS only makes small changes (I think one step up and one step down).
As other users have pointed out, the light sensor does adjust screen brightness depending on ambient light, but there is a delay of a couple of seconds.
The other thing it does is activation of the backlight on the keyboard. So in bright light the backlight is off, and it comes on in dim lighting.
I have also installed Simple Brightness Applet (good app!) which is useful for changing the screen brightness in large steps. This control is normally hidden in the settings menu. It doesn't disable the ALS since the ALS only makes small changes (I think one step up and one step down).
Again the only fix so far is in my thread or the wiki JonWW linked to.
Only downside is that the keypad will not dim also, but in my opinion this is a small price to pay for getting rid of that ignoring slow light-sensor screen fade + with the simple mod you get 5 good levels of light, instead of 4 dark and 1 thats to bright.
I had just tested and found that the keyboard back light works as you said.
Actually, I use a transparent screen protector to protect the screen from scrach, but the light sensor is covered by this protector.
It makes the sensor not that sensitive.
So everytime I open the keyboard, the back light of the keyboard always turned on.
To figure it out, then I used a flashlight to focus the light on the sensor and at the same time, opening the keyboard. This time the back light does not turned on, then I know that what you guys said it is just right.