This was very interesting news for us. Especially since we have had a 'lite' version of our app (comicstrips) in review for a month. Now only if we could change our paid app to free!
You can. Once you agree to the developer agreement, the "Free" option opens up on iTunes Connect. I spent a few hours tonight retrofitting my server to basically rejigger my app into a "trial mode" -- complete with no code changes in the app :)