So essentially all you are as a DM is a dice roller and the voice of the NPCs?
This is the problem with so many of the responses in this thread. You make it seem like it is the DM vs PCs and in order to make it 'fair' you roll in the open, so regardless of the outcome you can just throw your arms up and say "well I didn't cheat!" D&D isn't a tabletop wargame. There is no such thing as cheating.
Is it cheating to play with Legos and not build what is on the outside of the box?
Is it cheating to play with Play-doh and not make what is on the outside of the package?
D&D is a game of make believe. Treat it as such. Again, it isn't DM against PCs, it is a bunch of friends hanging out having fun playing make believe.
I can't help but notice the join dates of people in the die hard "omg that's cheating!" camp and wonder if this attitude is mostly prevalent in the 4E/WoW generation.
I don't think it has anything to do with 4E/WoW.
Personally, I almost never fudge because I have an extremely strong sense of fairness. I've played that way for nearly 4 decades. I try to put together a game ahead of time, I try to put some spotlight on each of the PCs, I try to not significantly modify my game unless players actions change the scenario during a given session, and 98% of my rolls are in front of the players (there are a few that are not when rolling would inform the players that something is going on).
No, I cannot plan for everything, so I do have to come up with some things on the fly, but my rule of thumb is moderation. My ability to do things on the fly is subpar at best and I know my limitations, so I tend to make middle of the road plausible / reasonable decisions during a game and save my imaginative game ideas for between sessions when I can take time to flesh them out and think about them a bit.
Modifying hit points or dice rolls to me feels like DM cheating. Not cheating in the sense that the DM can do whatever he wants, so he cannot cheat POV, but cheating in the sense of cheating the players and the story of opportunities.
Say for example that a DM feels that an encounter is going too easy, so he beefs up the monster hit points or does something else on the fly to make the encounter more difficult. Nobody is omniscient, even the DM, so the party ends up using a few more resources that they would not have used. Later on, lower on resources, the party decides to run away and not go to one more room in the dungeon. In my mind, the DM is cheating the players of "what might have happened" by fudging stuff on the fly. The next room might have been a dud, but it also might have been one of the most memorable encounters of the campaign and the DM inadvertently nixed it. Granted, running away could also result in one of the most memorable encounters of the campaign, but in the former case, it was a environment / player decision / random roll decision and in the latter, it was DM whim that led to player decision. I'm not big on DM on the fly whimsy, so I don't prefer this path. DM whimsy seems like the antithesis of a level playing field and jars my strong sense of fairness. All DMs have to make on the fly decisions, but in the sense of fairness, these should be unthought of scenario modifications / reactions and NPC decisions, not changing the rules, hit points, AC, etc. based on player decisions and the current flow of the dice. JMO.