I'm sure it's going to vary a lot by app. Some might be $1.99 (or cheaper) but I'm sure a lot are going to be more expensive. I have no idea on the prices we should expect but for something with a lot more programming into it (TomTom App, eventual SlingPlayer App or a in-depth game) I would expect to pay more.
Just like apps on other platforms they will vary in pice, from free to ?. I have already heard that the SplashData (Splash ID, Splash Money, Splash Shopper) programs wil be about $30 each, and if they bundle them like they do on Palm and Wndows Mobile the "Splash Wallet Bundle" would be about $45. These are three programs I don't mind paying for at all since they are well worth the money.
I think I also saw a few games thatwere going to be $9.99, (Super Monkey Ball)
Other programs that I know are coming (Pocket Informant) have not released proicing yet. I also read of some programs costing just $1.99 and several apps that were going to be free.
All I know is, currently as a developer, Apple has not approved me and several other (way bigger) iPhone developers to BE a developer and place apps at their iTune store. I filled out their application on day one and have developed several apps using their new SDK. I had planed to present these apps for free at iTunes. I think it is bad of Apple to only allow bigger companies this privilege. So, my guess, is that installer will live on to allow an even bigger range of apps.