I think that inserting the affiliate links was a clever way for the developer to finance a free app, but he should have been upfront about the manipulation.
In this case the developer hid the fact that he did this until others discovered it and then his reply was along the lines of 'It's a free program and I'll do what I want with it' (the developers original reply was here http://www.newsfirex.com/blog/?p=193, but he seems to have deleted it now).