[richardhenry]

Having spoken to foreign iPhone owners on a number of occasions and asked them about this (generally European countries where English is somewhat widely spoken):

Not having a native language version wouldn't necessarily dissuade them from the purchase of the app, but it's certainly appreciated if it has been translated. If anything, it just makes them feel like the developer cares about them and their market.

They would almost certainly choose a localised version of the same or similar app if it became available, over the English version (so it might be worth doing so for competitive reasons).

Many of the people I've spoken to said that they would generally not recommend an app to their non-English speaking friends if it were not localised, even if it was reasonably simple to learn how to use.

I've only spoken to a couple people, and they were pretty tech-headed, so it might be worth speaking to others.