It's a little marketing trick that has been relatively recently introduced, but now used globally.
something that is $1.99 sounds cheaper than $2.00. You think "Oh, it's just a dollar and a bit" when it is really just shy of two dollars. You think it's cheaper than it actually is and buy it.
Now, I know many people (myself included) that automatically round up the price. So the gimmick loosing it's power. Although, I have to admit that I get caught on it once in a while...
(edit) This trick is probably most effective at $0.99, $9.99, $99.99 etc. For the $99 you may think, that the item is less than $100, so you are more likely to buy it.