mcdan
I too have long wondered which route is the best route to take with revenue models. I've been studying the app stores a lot. When I do I look at the top grossing section.
The majority of the apps there have the revenue model of IAP. If you compare that to the most downloaded apps, you'll see that the top games in top grossing are earning more per download than those.
IAP will probably be the best route if you want to make the most money possible. But it also takes more work to implement correctly and make it worth the player's time and money.