I am wondering if AmeriCommerce will automatically mark an item "Out of Stock" when the quantity on hand gets to zero. If so, how do you go about setting this up?

This can be done by:

1/ Selecting the 'catalog' menu in admin and then choosing "product statuses"

2/ Make sure "track inventory" is checked. 

3/ Create a product status called "Out Of Stock" (if it isn't already there)

4/ Set "Out Of Stock" as your default 'out of stock' status.

If a product has 1 unit on hand, and 1 unit is sold, this will automatically change the product status from "in stock" to "out of stock" 

Cheers