I tend to just stick with free apps, unless I think something seems exceptional, or in some instances where there is no free alternative. Too many developers make the mistake of making a lite version that has everything you want, Lux Touch for example is probably the most run app on my phone, yet I haven't bought the full version as the lite version has no real downside .
i stick with free apps and $.99 apps. the highest i've gone are 9.99 for AC, 5.99 for HoS, and 1.99 for cro-mag rally(first app i bought!)
While I know I'm still spending a lot less than the height of my PC gaming days with games $20-$50 a pop, I'm having such a hard time finding restraint with all of the games I can eat coming in at $0-$5 a pop!
I've got a spread sheet with all my purchases in (sounds sad but it helps me know how much I'm spending) and I know I spend too much but there are so many games! I spend around $45 a month and so far this year I've spent $315.29 in total. The worst thing is about 10% of my purchases were deleted almost straight away because they were bad games.
I probably should take a tougher stand but so far I try to at least keep a copy of every game I've ever bought in my iTunes so that, in some weird case, it gets an update that then suddenly makes it playable (not so sucky), I'll know instantly.
I keep the games in my iTunes library, just not on my iPod. I really need to clean out my iTunes library though 635 apps take up a lot of space (7.72GB).