This may apply with OS X apps, but with iOS apps it doesn't make sense. For $0.99 you have little to lose if you download my app and you hate it, but to make a dumbed down free version that will entice you to buy my paid app I have to redesign it. I have to think from a marketing perspective. What can I take out to make it painful enough for you to buy? Do I put in a nag screen? Do I put it on a timer? If I am going to do all that I might as well make the app free and put in iAds.