I really found this article interesting. Its reports from a round table with business leaders about successes and failures to do with app store pricing:
http://gigaom.com/2010/05/19/never-charge-for-a-mobile-app-and-other-freemium-lessons-from-vcs/
To sum it up, basically they said that you should give your apps away for free and then sell upgrades. Make sure your audience is big enough to make money off a 2-3% upgrade margin. Worth reading though for many other tidbits of info.
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