This is probably a silly oyster-noobie question, but I'm finding the tfl
online advice clear as mud.

Understandable. They can be a little inconsistent with their info to say
the least.

I only use oyster on the buses - so what happens when my funds run out?
Firstly, auto-top up doesn't work with buses, and secondly when I tries to
add funds online, it said I would have to activate the added funds at a
Tube or DLR station. Is this right? Can't you add funds online?

You have probably read
http://www.tfl.gov.uk/tfl/fares-tick...er/general.asp which
unfortunately is out of date. Auto top-up now works on buses and at tram
stops and the initial auto top-up instruction can be picked up at tram stops
as well as tube and DLR stations (I'm not sure if season tickets and other
PAYG top-up can also be picked up at tram stops).

Of course if you don't ever use PAYG on tube, DLR or trams then that doesn't
really help much. You are probably best of adding funds at one of the very
many Oyster enabled 'Ticket Stop' shops around Greater London.

I believe you can also now order Oyster cards online that are already
enabled with the auto top-up instruction. You might like to look at that.

G.