System Configuration:
Redhat Enterprise Linux WS 4, Itanimum II (ia64), USB removable hard
drive (NTFS format), NTFS read only driver from
http://linux-ntfs.sourceforge.net/index.html. The removable hard drive
is used to transfer large files (> 4GB) from a Windows XP system to
the Linux box.

Current Status:
Whenever the USB hard drive is plugged in, it is automatically mounted
at /media/<drive_label> and a line is automatically added to fstab for
that drive. When the drive is unplugged, it is unmounted and the line
for it is automatically deleted from fstab. Currently the drive is
accessible (read only) only by root.

Goal:
A simple setting that will allow me to  keep all the existing
functionality (e.g. automatic mount/umount) and will also allow all
users to access the disk (read only as it is now).

What I already tried:
Editing the fstab line for the NTFS drive to override the user id
(uid=xyz). This however does not work since the NTFS line in fstab is
deleted each time the drive is removed.

Question:
How can I achieve the goal listed above?

Sounds like supermount is being used. Please 'lsmod | grep
supermount', and modprobe -r supermount if it's running.

Add a line like '/dev/sda5 /mnt/ntfs ntfs
noauto,users,ro,uid=1000,umask=000 0 0' in fstab. (ro doesn't really
matter, since I sincerly doubt you have write support for NTFS)

You might have to manually change the permissions of /mnt/ntfs for
users to access it, but after that you should be good.