The market has shown that free apps will be downloaded at least an order of magnitude more than paid-up-front apps, and smart use of in-app purchase in a free app is likely to make more money. Over time, this trend has only become stronger and more clear.
The real question is how to integrate in-app purchases in a way that is compelling to users, but not nagging of users. The more subtle, the less money you make. The more aggressive the nag, the shitty the app you make.