My opinion: if you want to have a free version, you should charge .99 cents for it and reinvest all the proceeds into some kind of smart advertising. This way, you have the satisfaction of knowing you created something another person found valuable, can figure out what paying customers want (you know, the ones you want in the end) versus the kind of feedback free customers might give, and get to learn how visitors to your web site react to various types of advertising.
I do not remember which podcast it was on mobileorchard, but they discussed how in their free app many people complained because it was not "feature rich" enough. It seems these people wanted a free app, and that they were not willing to ever buy the real app. None of their comments helped improve the application and did not seem to lead to conversion.
There is not much a free app can do that a video on review websites would not do if someone was serious about buying the app.