I had jumped on the app store bandwagon at the outset and did alright selling apps at 99¢-2.99 but was hesitant to switch to IAP. It turns out I was wrong and the kids apps that did switch faired well enough to continue. E.g. While I was fighting for 99¢ sales, other similar apps were selling $10 bundles for graphical skins. As a developer it makes me ill that the core experience is worth nothing, but some new flashy artwork can be sold for $10. Sigh, but it works.
Good luck.