So, if I list an auction that's say $10 and $4 shipping and I list 10 of these auctions.
Someone buys them all. I only charge him say $5. (using ebay's invoice system).
Am I charged the ebay shipping fee on $40 or $5?

$5. The fee will be on the combined shipping amount you sent on the invoice.

On your actual line item invoice, once you've sent them an invoice that combines the shipping to $5 and they've paid it, you'd be charged the fees on each auction as though you'd charged 50 cents shipping for each item, so the 10% fee would be 5 cents on each of the 10 transactions, making it 50 cents total, 10% of the total $5 charged, as noted above.

I just re-answered in a bit more detailed way just to point out this is why it's important the buyer pay on a single invoice for multiple items whenever possible. If they buy 10 items, all with $4 shipping, and pay for each separately, your Ebay fees on shipping would be for the $40 total shipping they paid, or $4. You would usually refund the extra shipping they paid as a Paypal refund, $35 in this case, but Ebay doesn't return the fees and keep only the 50 cents on the $5 shipping you actually charged, they keep the whole $4 on the $40, so you'd be out the $3.50 in that case.

It doesn't happen too often, but it does happens, and you don't really want to be mad at or else nickel-and-dime someone who just bought ten of your items, so in those case, I usually just cover the expense out of my end, and be glad for the purchases. I might send a friendly note letting them know why it's better for us sellers if they wait for a combined invoice before paying if buying multiple items in the future.

I had some buyers of combine sales no waiting for the update invoice. I can be a problem because after they send the payment is when the S&H fee applies.