Right or wrong, I use the AppStore ratings when I buy an app. There are some developers, that I don't need to see their ratings, I'll just buy their apps. But that is a vanishingly small percentage of developers on the AppStore. For the rest, ratings matter.
When I'm shopping for an app, there are several things that contribute to my buying decisions.
You get what you pay for
I would rather pay for an app than to adopt a free app that gets abandoned. Or, worse, to see ads in the app. I might try a free version but most of the time, I just spend the couple of bucks on the app. If the app only has an ad or In-App-Purchase business model, then it's really not for me.
The flip side is that if I pay for an App, then an update should not remove features or substantially downgrade what I bought. If you want to see a lot of pissed off customers, follow the WeatherBug model. I barely tolerate that kind of business model from AT&T and Verizon, and they're providing a core piece of my technology.
3 stars or better
If an app has less than three stars I look more closely at the developer's other apps and what the reviewers are saying. If it has five stars I don't look as closely. For good or ill, reviews matter. A dozen one star reviews complaining about broken features are a warning I can't ignore.
While I understand that there are a lot of bad reviewers, there are also a lot of bad apps. I have limited time to find a good one. When I search the AppStore, I often filter apps by star ratings. My default is 3 stars.
Get a site, hippie
I look for a developer's website. Most shovel-ware developers don't even bother making a site. I also look to see if the site has a support contact list. I rarely contact support, but if an app starts messing with my Dropbox data, I will certainly want to talk to a developer. If I really like the app, I'll also want to help make it better by providing constructive feedback and kudos for nice work. A Web site is that extra bit of professionalism that tells me a developer is taking their app seriously and I can expect the app to be updated over time.
Does this smell expired to you?
I look at the date it last received an update. If an app has not been updated in three months, I am far less likely to buy it. Nothing is ever bug free. If they haven't bothered with even a bug fix in over three months I assume the app is being abandoned. Of course, this is a grey area. Some apps have minimal features or are close to feature complete. They usually get fewer updates. But if they have not updated since the last OS release, it's probably never going to get an update.
Nickels and Dimes
I hate In App Purchases. I'd rather pay full price and get more features than I need. I don't want to buy an app specifically designed to force me to buy more pieces to complete the feature set. I wouldn't buy a puzzle with in-puzzle purchases. Just make a good app and I will buy it.
I look to see if an app has a list of in-app-purchases. If it does, I almost always move on. If it's a kids app, I definitely move on. I will not EVER buy a kids app that has an in-app purchase available.
I realize that IAP can be done right, but it rarely is. Most of the time it makes the app feel cheap.
Show your money maker
I look at the screen shots. I assume that the developer is showing what makes their app valuable. If they are showing a splash screen in their screenshots, I'm probably not going to buy it. The AppStore screenshots and summary are like an elevator pitch. It should hit the top five features of the app. It's O.K. if there is only one screen shot if that shows the best the app has to offer. This also goes back to the developers site. Most good apps include additional screenshots or demo videos on the app's web page.
Summary pages are also a good opportunity to up sell me while I'm paying attention. I am very likely to browse around if the demos are good and the summary is compelling. I regularly click through on the list of other apps by the developer if the app looks good. I'm a consumer. It's kind of what I do. I buy stuff I don't need based on good marketing.