>> As human needs and wants are essentially unlimited (most of us want to go to the moon if it was possible) then, for each good that falls in price, demand will shift to other goods. As automation lowers the cost of each additional good, a person is able to consume more of that good or more additional goods.

I'm well aware of the Luddite Fallacy :)

While it is true that the economy has thus far been able to re-absorb a workforce displaced by automation, we should not take as a given this will be the case forever.
Certainly not based on the premise of "infinite human wants".

Frankly, I am not convinced our desires are in fact infinite. Our demands do adjust with opportunity, but only to a point. For instance, many people are satisfied after achieving a certain relative level of security and comfort.

However, more important than demand is how many workers are required to meet the supply. If innovations in automation continue at even a linear pace (and, frankly, we're probably talking quadratic), then we will eventually reach a point where staggeringly few actual workers are required for the production of a given good.

On a slightly less speculative note, a documented phenomenon of workplace automation in developed nations in recent years is the increase in income & labor polarization (or, inequality) [1]. Essentially, while total employment is somewhat maintained, skill (and, to a large extent) income become polarized at the ends.

From the MIT study [1] :

In net, employment changes in the U.S. during this
period were strongly U-shaped in skill level, with
relative employment declines in the middle of the
distribution and relative gains at the tails

...

Technological progress in our model takes the form of an
ongoing decline in the cost of computerizing routine
tasks, which can be performed both by computer capital
and low skill (‘non-college’) workers in the production
of goods. The adoption of computers substitutes for low
skill workers performing routine tasks–such as
bookkeeping, clerical work, and repetitive production
and monitoring activities–which are readily computerized
because they follow precise, well-deﬁned procedures.
Importantly, occupations intensive in these tasks are
most commonplace in the middle of the occupational skill
and wage distribution

The same paper does mention that some low skilled workers are able to shift (and even see some relative wages rise) towards service economy jobs. However, that certainly doesn't change the macro picture.

Lastly, in the near-mid term the greatest challenge is most likely not the absolute out-and-out displacement of work, but rather that displacement vastly outpaces the ability of the economy to re-generate employment.

>> This has been going on for a millenia, and there is no tipping-point or transition point, as it is a very smooth curve.

A very smooth J-curve perhaps. Implying that historical trends over the past millenia are a guaranteed predictor of future events is a highly dubious claim. We are living in a relatively unprecedented age of advancement and growth by just about every possible measure, and it's hardly a given that what has held true in the past (e.g. "Luddite's fallacy") will always hold true.

[1] http://economics.mit.edu/files/1474

[2] http://www.economist.com/blogs/babbage/2011/11/artificial-in...