I've had success with .99 cent auctions, and also $1.99. Some items sold for double or even triple retail price (!), I guess people do love winning, once they've entered a bid.
But there were some items that only received the 1 bid at the last minute, and I lost on those.
There is a strategy no-one has mentioned yet, and that is ENDING YOUR LISTING EARLY.
The policy is at http://pages.ebay.com/help/sell/end_early.html.
Basically up to 12 hours before the auction end, you can end the listing, even if it has bids. The listing fee is still payable, though if it started at .99, that's not a lot.
The trick with this is keep an eye on the number of watchers, and the number of bidders. If one or both of those is still low the day before the auction end, then it's likely the ending price will also be low. In which case, you can end it if you want.
This is not a foolproof strategy, as a lot of the action in an auction is right at the end, so by ending early, you may miss out. However, it's good to have that choice.
Hope this helps :-)