Hi Tom,
Not sure what the problem is you're having with auto-bracketing, but here's how you set it up on the D7000:
Click on the menu button on the rear of the camera. Select custom settings. Select 'e' which is bracketing/flash.
Select 'e5' which is Auto Bracketing Set. Then select 'AE only'.
Then hold down the bracketing button which is directly below the button for the pop-up flash.
Whilst holding that button down rotate the front command dial & select the exposure value. I usually use 2 stops.
The whilst still holding the bracketing button down rotate the rear command dial to select the number of exposures.
I usually select 3F which is 3 shots. That's the max number you can do with auto-bracketing on a D7000.
To take more shots you need to do it manually by taking the camera out of bracketing & use the exposure compensation button just behind the shutter button.
You can dial in up to + or - 5EV (5 stops).
The auto-bracketing should work regardless of whether you use manual or aperture priority mode.
You can auto-bracket more than 3 shots by using a device called a Triggertrap.
Its an app for an iPhone or Android phone & you use it as a remote to control your camera via a dongle connector.
Pretty sweet!
As for HDR processing with Photomatix, I'm not a big fan!
If you use Lightroom there is a plug-in called LR/Enfuse that processes bracketed shots.
You have little control over settings, but I much prefer the results.
It won't give strong effects like Photomatix will though - produces a more natural & neutral blend that you can tweak.
So depends on the look you want.
It's pretty cheap too - a donationware app.
Check it out.
Hope that helps!
Ciao,
Vic.