I never fudge the dice. Not only that, I roll outside the screen for any roll that would be evident (such as hits, damage, and saves) as soon as it resolves. This means that when a PC dies, the player doesn't feel as if I "let" the character die, or "made" him die.
I find the "the dice are the master" thing a bit insulting. If you're going to fudge, then why bother having dice at all? I've played Amber Diceless Roleplaying, it's a great game, but it suffers if the GM can't be VERY detached and free of favoritism. I don't plot out my dungeons by rolling, I don't roll randomly to figure out what each NPC's class is, I don't give them random personalities, I don't roll on a toothsome wench chart when the PC's roll into a bar. The dice don't rule my game, and I resent the implication that anyone who doesn't fudge is a slave to the dice.