Is there a major advantage to newsstand over regualr app other than changing screen shots without submitting to apple?
If i have a free multi-issue app with subscription enabled do i still have to submit in-app purchases to apple even though all content is free to download when i add a new issue(in newsstand)?
If you have a newsstand application you can use push notifications to trigger a background download of your most recent issue when you publish. Also your publication shows in the newsstand section of iTunes and in the newsstand icon on the device.
Edit: I was wrong, Apple apparently does not have to approve free in-app content. Thanks Bob B.!
Can an app published in the App Store already as a multi-issue be converted to a newsstand up in a later version? Will it update and jump to the newsstand once the new app is approved by apple and the update is downloaded?
Yes, you can convert a multi-folio non-Newsstand app to a Newsstand app when you submit a new version of the app. You'll need to follow the steps in the publishing companion guide to edit the App ID to enable push, create push certificates, update the mobileprovision files, and create a subscription in-app purchase in iTunes Connect. Once Apple approves the new version, the app will appear in Newsstand rather than on the home page when users download or update the app.
Personally, I think the Newsstand app is tampering too much with the iOS user experience. The user can't manage his/her own app icons any more; the icon changes regularly over time to an new one the user hardly recognizes anymore; the icon in the multi-task bar changes to a horrible rectangle (I bet Samsung could file a lawsuit on Apple's neglectance to stick to their their rounded corner look... ;-)
So all in all, it's a publisher's efficiency dream come true. The place where the users keep their publications has become a direct connection into the store. But it's not my idea of a "coffeetable" or "bookcase" anymore. After all, it's called "Newsstand", not "Bookcase". But still, I do think it has gone too far.