You will want to use PHP to send the emails and interact with the database.
You will want to use a CRON job to schedule a script to run once an hour or so to check the database for expired auctions and send out the auction expiration emails.
You will want another PHP script/page to be the target of the seller's confirmation link; this would market the auction as in progress or cancelled and email the auction status to the bidder.
If this is a learning project, that should be a sufficient start for you (use the
PHP Manual to learn that if you need to; search the forums for how to schedule a CRON job or perhaps someone after me can give a good explanation of exactly how to do that). Ask if you want more detailed instructions. If you are looking for a finished solution, then you can try posting this request with a credit or PayPal bounty (i.e. offer credits or $) in the "Ads & Offers" forum in the "Site Promotion" section. Hope that helps.
