Autobiography in Fiction: What are the boundaries?

The great thing about managing this blog is it gives me the opportunity to learn about writers I may not otherwise study. I was doing some research on our current poet, D.H. Lawrence, who, although an accomplished poet, painter, and critic, is best known for his novels. It is understood within the scholarly community that Lawrence's work was highly autobiographical, and that he drew from personal experiences and acquaintances to inspire his work. His home town of Nottinghamshire frequently provided the setting for these stories. Check out this site for lots of great info about Lawrence's life and work.

Many times, the people of Nottinghamnshire were offended by Lawrence's work, because they could recognize themselves in the often unflattering portrayals of the characters in Lawrence's books. Apparently, Lawrence did not try too hard to disguise who was inspiring what character.

What are the boundaries, do you think, for this kind of writing? Today, the lines between genres are more blurred than ever. We have memoir, which is different from autobiography, which can be different from other kinds of non-fiction, which is different from fiction, but these categories frequently blend and overlap. Does a writer have an obligation to protet the identities of real-life people who inspire their characters, or does it depend on the genre? Is it enough to simply change a character's name? What about memoir? What are the ethical/ literary boundaries?

Thoughts?