It's a really simple choice for an app developer, you either charge up front in which case apple for the most part controls the environment where the decision to buy or not is made. Or you charge with an in app purchase in which case you control the environment in which the decision is made. You can A/B test e.t.c.

I get that, but it's still sneaky. I would like to see the AppStore/PlayStore create a third category to add to "Free" and "Paid" being "IAP"

It's to the point where in the AppStore I look to see if the top related purchase are some $4.99 coin pack or whatever and if so, I'm out.

Yes, and very annoying for my children. And for me.

Excellent point. On the iPad, my young kids can do most things easily, except deal with these advertisements. It usually exits the app, brings up Safari and they wonder what's going on. The second most annoying thing is OpenFeint - Can't this be globally turned off?

The way Apple's restrictions work, you can't build global opt outs like that. Services, for the record, would love to be able to do it; in fact, I was once begged by some companies in the analytics space (think Flurry) to build a global opt out for their products on jailbroken devices, and after contacting other companies I found out they all wanted to do it but couldn't (so I built it).

You can block kids from using in app purchases by going to Settings > General > Restrictions > In-App Purchases

That doesn't stop the app from prompting for the in-app purchases, it just prevents unwanted transactions.

Go download Talking Tom (it's "free") and see what parents complain about. Turning off purchasing doesn't stop my 2 year old from hitting one of three or four "upgrade" buttons available on screen at any given moment, bringing up a popup or opening a browser or the app store for cross promotions. I would have actually bought the damn thing because of the entertainment it provides if it weren't for refusing to support the total sleaziness of that monetization method.

Exactly - I'm actually considering going to the Kindle because it supposedly has a mode where you can determine what your children have access to.

I don't know if that will help. You can already lock down iOS pretty tightly for kids. It's the apps themselves that are the problem.

There's just a huge, annoying trend of making apps crippled or annoyware until you buy some ridiculous IAP. AFAIK, that situation is not much different on Kindle/Android.