I think this is a great move.
We see a lot of posts on HN about raising the price to increase your userbase, but $50 was too high for a product in such an early release stage. Great for those die-hard early adopters (probably the people after whom Dalton was chasing), but terrible for the everyday Twitter user who is tired of the horrific signal-to-noise ratio on that service.
That said, my opinion would be that $24/year would be even better for an annual subscription. $2/mo is a lot of money for a "Twitter clone," but is cheap enough that it would be easy to convince your friends or colleagues to sign up. $36 might have hit the price point that I'll give it a shot as a (relatively) early adopter, but I'm not sure. $5/month, almost double the annual subscription fee, is too much for a thirty day trial run.
I'm one of the (few?) believers that app.net can really take off. I've tried Twitter, and while I'm relatively active, I can't help but feel that I'm lost in the oft-cited "echo chamber." I'm looking for a service with Twitter-like abilities, strong interaction and an intelligent community, and I think app.net will (someday) be it.
Congrats to Dalton for lowering the price in what must lead to hugely increased participation.