Using a PAC file is a very good way to manage a complex proxy infrastructure and how it integrates with the desktop. Most companies start with simple browser exceptions and a hard-set proxy server and rapidly outgrow it. Corporate networks are large, complex entities that have complex traffic flows between local networks, directly-connected vendor/partner networks and the Internet. Often DNS domains are split between internal and Internet hosts which require complex routing and acquisition of other companies can add another entire level of complexity.
With a PAC file, you have full if/and/or logic and the ability to structure your queries in whatever order you want. This becomes especially important if you have hosts in your local domain that must be accessed via your proxy. For example, www.company.com is on the Internet and must traverse the proxy while the rest of "company.com" is internal and doesn’t need to be proxied. This is nearly impossible to fix with manual browser settings which send all traffic to the proxy and only permit exceptions which are sent browser direct. The first time you get a host in a domain that needs to be proxied, everything else in that domain becomes an exception and becomes impossible to manage without using a PAC file.
When a browser is set with a PAC file it pulls that file from a central server. This means that the file centrally controlled and managed rather than distributed on multiple PC’s or servers. When a change must be made to browser routing, the PAC file can be centrally updated and the browsers will retrieve the new copy the next time they launch. No more managing browser exceptions via group policy or trying to explain to your users how to manually add a browser proxy exception to fix a problem.
Another benefit of a PAC file is for laptops. If you have hard-set a proxy and you connect a laptop into the Internet it won’t work until you manually reconfigure the browser. A browser configured with a PAC file should work equally well on the corporate network or directly on the Internet.