APP OPVERLAP

Because the App Store is such a big ecosystem, it's inevitable that there are redundant applications. Some categories see more overlap than others, but in general it's common to find multiple apps that do the same thing.
Functionality:

The most basic and most obvious reason for an app to be more expensive is that it can flat-out do more. A casual Twitter user might be happy using Echofon for free, but if you need support for multiple accounts and the cleanest UI around, you're going to be happy coughing up three bucks for Tweetie 2. Make sure to read up on the full feature set of what you're buying. If you're about to pay for something with more firepower than you need, there's likely a free (or cheaper) version that'll suit your purposes. The paid app will still be there if you decide you need more functionality down the road.
Ad Support:

Often, and particularly with casual games, the only difference between the free and paid versions of an app is whether you'll be saddled with advertisements as you use it. It really depends on your threshold: is it worth three dollars to play Words With Friends unfettered, or are you willing to endure the between-turn sales pitches that accompany Words With Friends Free? Each app integrates ads differently, so it's worth trying out the free version first. Too many banners cluttering your screen? You're only a click away from an upgrade.
Ripoffs:

It might be helpful to think of the App Store as a giant, unruly bazaar, with thousands of vendors peddling their wares. There's some oversight when things get out of hand, but even the $999 "I Am Rich" app was downloaded eight times before it got shut down. Like in any sales environment, it's important to remember that what something costs usually has very little to do with what it's worth. Don't just go by the star system; read through the reviews to make sure that the app lives up to the developer's description.

APP OPVERLAP

Because the App Store is such a big ecosystem, it's inevitable that there are redundant applications. Some categories see more overlap than others, but in general it's common to find multiple apps that do the same thing.
Functionality:

The most basic and most obvious reason for an app to be more expensive is that it can flat-out do more. A casual Twitter user might be happy using Echofon for free, but if you need support for multiple accounts and the cleanest UI around, you're going to be happy coughing up three bucks for Tweetie 2. Make sure to read up on the full feature set of what you're buying. If you're about to pay for something with more firepower than you need, there's likely a free (or cheaper) version that'll suit your purposes. The paid app will still be there if you decide you need more functionality down the road.
Ad Support:

Often, and particularly with casual games, the only difference between the free and paid versions of an app is whether you'll be saddled with advertisements as you use it. It really depends on your threshold: is it worth three dollars to play Words With Friends unfettered, or are you willing to endure the between-turn sales pitches that accompany Words With Friends Free? Each app integrates ads differently, so it's worth trying out the free version first. Too many banners cluttering your screen? You're only a click away from an upgrade.
Ripoffs:

It might be helpful to think of the App Store as a giant, unruly bazaar, with thousands of vendors peddling their wares. There's some oversight when things get out of hand, but even the $999 "I Am Rich" app was downloaded eight times before it got shut down. Like in any sales environment, it's important to remember that what something costs usually has very little to do with what it's worth. Don't just go by the star system; read through the reviews to make sure that the app lives up to the developer's description.