[ronyeh]

Get the Apple Developer membership.

Create a free iPhone game using your favorite platform (native Objective C, PhoneGap, Sparrow, or Cocos2D).

Sign up for AdMob/Google. Create an app id entry there for your game. You'll get an AdMob ID that you can use to query for ads.

Ad a 320x50 AdMob banner at the top or bottom of your game.

Sometime during your free game (say, the end of level 2) tell them about your premium version that is awesome, has no ads, and has lots more levels. If they dismiss your ad, let them continue playing your lite game.

[coryl]

Or integrate in-app purchases, which is more likely to generate a conversion!