Increasingly the App Store will become more like Amazon, with it's billions of items for sale. It will contain references from one product to another, it will contain suggestions based on the user's preferences and purchase history, but overall the App Store will cease to be the only way people market their apps.
Remember all the other ways there are to make sure people are aware of your iphone app. The larger developers, and the larger clients (like Barnes and Noble and State Farm) already know this and market their apps through their traditional channels-- television ads, posters in stores. Everyone is going to have to do this, and the little guy is going to have to get on board.
I think you'll see consortiums of iPhone app developers forming, pooling their marketing muscle, joining together to make "labels" of like-minded people or tools of the same ilk.
But eventually, just getting your app into the Top 25 and having a 99-cent sale isn't going to cut it. There will simply be too many apps for that kind of ploy to work. And thank god for that-- I'm a consumer; I don't want the App Store to have a limited number of apps in it. For one thing, who's going to pick and choose what apps are good enough? Apple? They have a hard enough time just enforcing their current rules without making subjective quality judgements. Best to let the market decide, I think, even if that means the deepest marketing pockets will get the most attention. There will always be "underground" places where little-known apps are talked about, and there will be people who seek them out. This is how the jailbreaking communities survive-- both for iPhone and stuff like the Wii or Xbox.