The George Pelecanos book I just posted below is one of those things that I normally wouldn't buy, but was on sale for something like $3 a few weeks back. Right now it's going for $6, and the mass market paperback is $7.50 at Amazon. That makes sense. I know that there's a lot of hue and cry about new books for the Kindle being priced at $9.99, with readers saying that anything more is robbery, and publishers saying that there's no way to make money at that price. Frankly, I don't care. Charge a premium for new titles, charge as much as a new hardcover would cost, just make sure that the price drops as time passes and interest wanes. There's no reason why a 2-3 year old novel that has long since been released in paperback should still have an electronic version pegged to the new hardcover price. $6-7 is good, $3-4 would be better.
My favorite example of this is the book "Print is Dead," by Jeff Gomez. As of today, the hardcover list price is $24.95, discounted at Amazon to $18.96. The Kindle list price is also $24.95, discounted to $14.97. The paperback list price is $16.95, discounted to $11.53. Print may be dead, but it's still cheaper than bits, apparently.
My point is that these back titles are usually found money. Pelecanos is in a different league, but most titles, if they're going to become big runaway hits, have become runaway hits by the mass market paperback stage.