So, first thing to note is the difference between Top 10 in the free Medical category vs. Top 10 of all free apps. Not to talk down about their achievements, but the #1 Top Free Medical App doesn't even break the Top 200 Overall Top Free Apps.

My thoughts are if you are planning on adding ads eventually, you should ad them with version 1. Otherwise, people will complain when they come later.

We launched a free App (AppShopper) a couple of months ago, and we did hit the top 10 overall free.

We planned ahead with a dedicated server with a caching system (Squid) and the ability to spin up EC2 instances to mirror further. Fortunately, the one server (and the db server behind it) was able to handle the single traffic peak (which was over 100,000 downloads in a day).

I can identify with the testing thing (or lack thereof), as you can't fix a problem quickly, since you have to go through App approval. Which can be frustrating when there's a crashing bug.