HN user
"Better options" is always relative. If you absolutely need cash-flow and freedom from administrative hassles, Startup Chile is not for you. But if you want some seed money to build on an idea without giving up any equity, and have ~8 weeks of working capital, this is a great deal. It all depends on the context of you and your company.
Startup Chile is a great program, but Herval's post is completely accurate (I was in his cohort there building pingpigeon.com). Drawing down on the funds takes a lot of paperwork and time and negotiation, when the government bean counters inevitably find some random reason to disagree with you.
The money is there for you to get it; Startup Chile is not "Bullshit". But once a month, the time and emotional energy spent in getting the money takes away from your ability to focus on your startup. Raising vc/angel money is the same: your company gets put on hold while you raise the round. Think of Startup Chile reimbursements as the same but on a much, much smaller scale, six times over six months.
From a slightly over-structured perspective, you can think of pricing strategy in one of three ways: cost+, value to customer, or competitive benchmarking (market). You can probably figure out the meaning of all three but in case not:
Cost plus is simple in that you calculate how much it cost you to make something and then charge more than that per unit, ideally with a margin you are happy with. Not too applicable to this situation, but if you want to think about it, take your hourly salary * # hours you spent on this for total cost. Figure out how many downloads you can realistically get at some price and then you go from there (hint, 99c is probably ok from this perspective).
Customer value pricing is much more of a nebulous science. Basically, you try to figure out how much value people attach to certain product characteristics or functionalities. In reality, you can observe customers, interview/survey them and do other experiments. From a more basic perspective ask yourself this: how big of a problem does my product solve and how important is that problem? The QuickOffice app solves a huge problem for me (I can't get my computer files or edit them on my iphone)and so I paid $9.99 for it. Angry birds solves a smaller problem (I'm bored for a few minutes) so I only pay 99c for it. How do you know how big of a problem you are solving? Ask yourself what a user would do if they didn't have your product: without QuickOffice, I would have to drive back to my house and get my laptop. With Angry Birds, I just read the news for a few minutes instead. With your app, I could foresee the problem being solved by manually entering the movie title.
For iPhone apps, competitive benchmarking is most important. Really, unless your app does something extraordinary, it should be 99c or free. However, in your case, I assume you might be doing doing this in order to learn. You will learn more if you get more downloads, and therefore more user data/feedback. Therefore, there may be greater value for you would be to put it out there for free. Use the experience and insights you gain from this to build something even better in the coming months/years.