I thought about both paths (lite or in-app) when I was writing Goal Meter. I decided on offering a lite version for these reasons:
1. I would have two spots on the store instead of one, and
2. People looking for free apps and paid apps may be two different crowds, and it would not be obvious that the only way to get the paid version is by first getting the free version.
It seems more elegant to offer free apps and then do an in-app purchase to unlock all the features, but I don't know if it's the best marketing strategy. I figured I would offer two versions, paid and free, and go after both groups, while trying to convince the free users to upgrade. My assumptions could be wrong -- I've only been at this for a month.
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Developer of News Clocks - Awesome World Clock for iPad and iPhone
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