Even if this spell is on auto-cast, the Felhunter will NOT automatically use it on the Warlock that controls it. You must target yourself, then manually use the spell.
Avoid setting Devour Magic to auto-cast in PvP situations. Since the Felhunter can cast Devour Magic on the Warlock while he or she is incapacitated, the Warlock is able to break out of fears, silences, sheeps, slows, and many roots or stuns without popping a trinket. See Felhunter Tips for more details.
0400Patch 4.0.6 (8-Feb-2011): Cooldown was increased to 15 seconds, up from 8. Devour Magic is no longer able to be auto-cast.
0300/0400Patch 4.0.1 (12-Oct-2010): Devour Magic no longer removes a harmful spell from a friendly target. (Not entirely certain in which patch this change was actually implemented. This patch is an estimation from what info I could find.)
0100Patch 1.2.0 (18-Dec-2004): Fixed a bug where the felhunter would be healed every time the spell was used, in addition to the healing gained from successful dispelling.