I have an application that I\'m going to publish to the Android market. I\'m planning on releasing a paid-for version and a free version with restricted feature set.
Yes if you want to have 2 different versions they must have different package names. I have free and pay versions and it is a pain to manage this and both code bases.
Another option though is to just have a "key" app that you can sell that will unlock features in the free version.