Off the top of my head:
Pros:
- The obvious: no more lite versions! Apps can have a fully-functioning trial period.
- Paid upgrades! Apps can now offer upgrade pricing to existing users.
- Upgrading from the trial version to the full one (or any future version) no longer means lost data for users, they can continue using the app as normal.
- In-app purchases provide better protection from piracy; to my knowledge, apps can’t illegally install DLC. It’s also nice that Apple is finally acknowledging iPhone piracy.
Cons:
- The free section will now be muddied with totally free apps and “partly free” ones. This can be remedied by separating the listings, or prominently displaying a badge for apps that have DLC.
- Free apps have notoriously bad ratings, usually disproportionate to the quality of the app. So any paid app that gets listed as a free app with unlocked functionality will suffer, ratings-wise. Perhaps Apple can again restrict rating only to those users that have both downloaded and paid for the app.
- Apple lied – again. Apparently, free is no longer always free. But does anyone really care?
As a whole, this is excellent news: it solves many existing problems with the App Store, and only introduces very minor issues that can easily be addressed.