The payment method matters a lot too, paypal and credit cards are for practical purposes unusable for services under $2 / month, you'd have to charge for a year in one go, and annual renewal rates are terrible, they're much worse than $5 / month because people will no longer remember what that charge was for and they'll cancel, or worse, they'll charge back and it'll cost you more than you made in the whole year ($25 chargeback penalty, even if it isn't your fault), not to mention a hit on your chargeback record which could at some point cost you your merchant account (usually a 1.5% limit on chargebacks).

$10 (or $9.95) is where the game really starts, less than that is really only to get people to subscribe for trial purposes for 3-10 days with an automatic up-sell to the full rate if they don't cancel.

That's a tried-and-true scheme and it is good for a very large portion of all online revenues on services.

The biggest problem - and you address that somewhat in your last paragraph - is that people that pay $1 feel just as entitled (or even more in some cases) to your premium support time, because, after all they are now a paying member, they intend to get their moneys' worth.

On a $1 charge you can afford support on roughly 1 in 50 customers, it had better be a very quick to resolve issue.