I'm not sure what the question is on buying hits.
Yes, when you buy hits, you trade in 4 dice to get one automatic hit. That is to say, you got a hit on the test if you have 4 dice, 2 hits if you have 8, and so on. The trade off is that yes, thats not the "right" ratio for hits to dice (3 is the "proper" amount by probability). Also, the fact you have to do it all or nothing (can't buy 2 hits, and roll your 3 remaining dice).
Its completely at the GM's discretion.
Really the only thing I'm not 100% on, is if the GM is in his rights to force the buying of hits. That is to say "No, you may not roll your 20 dice, you just have 5 hits." I'm not 100% sure if its proper for a GM to demand that. I would not, but my players, with their luck, would probably choose to buy hits.
What would the "automatic hits" portion be errata'd to be anyway? That phrase naturally goes with the idea of "buying" hits.