It was with a bit of ironic amusement that I read Craig's thread on the Kindle boards about cutting his price to $0.99. I decided a couple of weeks ago that I'd raise the price of my own book at the end of August. My rationale: sales have been very, very slow. Therefore, I have little to lose and lots to gain.
I settled on a $7.99 price point after clicking through lots of other books on Amazon in my genre. It seems that $7.99 is the low end for an ebook from a traditional publisher. My bet is that readers see a $2.99 book (my original price) as self-published, with all of its attendant stigma. A price reflecting that of a traditionally-published book, however, might be taken more seriously.
As with anything else related to price, this is an experiment. I'm willing to be wrong. I'd love to be right. Either way, I'll let you know how it goes.