You still have to tell the game what you want in which tiles, the auto-upgrade thing automatically upgrades a given improvement to the next one. I.E. a factory will get upgraded to an enhanced factory when you research the right techs. Depending on the PQ, I have at least 7 factories (to allow the auto-upgrades to not take forever), and alternate between population (farm + morale booster), research or economy, depending on what special tiles the planet has.
The biggest thing that I use the governers for is to easily update ship building. I like to play on gigantic maps, so I tend to have ALOT of planets. I only have a few that are used to make warships, and the rest usually make constructors. If I want to stop making tons of constructors, I just use the governer to set everyone who was building constructors to now build nothing.
Or, say I just researched a new manufacturing technology, and I have a ton of starbases to upgrade, then I just tell the governer to set all planets building nothing to make constructors.
Since I have relativly few shipyard planets, I usually manage their shipyards manually.