Originally posted by dream-scape
Here is an overview of recent research done into numerical cognition, specifically dealing with 99-pricing and the left digit effect:

http://www.acrwebsite.org/topic.asp?artid=274
Interesting. The last few lines do kind of sum it up.

Sometimes, when the numbers are close to each other and the encoding process becomes relatively difficult, the magnitude tends to get anchored on the left-most digit. This underestimation, arguably, occurs when we do approximate analog comparisons rather than precise arithmetic comparisons. Our view is that people do have the ability to be more accurate when they want to be, but obviously such accuracy comes at the expense of additional time and attention.