Update:
I noticed, in the custom styles sample app, that if you click Use Autoheight Columns, then checked the Use DataTable checkbox, the autoheighting would disappear, leading me to believe that there's a bug when a new datasource is applied to a design-time created autoheight column.
I was able to get around this by adding the following code to my constructor:
FlyGrid.BeginInit();
int i = FlyGrid.Columns.GetColumnIndexFromFieldName(\"Description\");
Column c = new AutoHeightMemoColumn(\"Description\", \"Description\");
c.FormatFlags = (StringFormatFlags)0;
c.TextAlign = ContentAlignment.TopLeft;
c.FitMode = ColumnFitMode.Spring;
FlyGrid.Columns.Items[i] = c;
FlyGrid.EndInit();
Still, this seems hackish.