An 'in-app purchase' is any of the purchasable item available within an app. These can include non-consumable single purchases and both free and paid auto-renewable subscriptions (though Apple do not give the option of having a paid and free subscription within the one application).
Oomph applications use a subset of the purchases available:
Non-consumable In-App Purchases only need to be purchased once by users. Services that do not expire or decrease with use are usually implemented as non-consumables, such as new race tracks for a game app.
Auto-renewable Subscriptions allow the user to purchase updating and dynamic content for a set duration of time. Subscriptions renew automatically unless the user opts out, such as magazine subscriptions.
Free subscriptions are a way for developers to put free subscription content in Newsstand. Once a user signs up for a free subscription, it will be available on all devices associated with the user’s Apple ID. Note that free subscriptions do not expire and can only be offered in Newsstand-enabled apps.
You may want your content to be free and set up free single issues with the option of a free auto-renewable subscription. Or, you may wish to charge for your content and give users the option to pay to download single issues and also offer 2 month, 6 month and 12 month auto-renewable subscriptions.
If you want to charge for your content you need to make sure you always have in-app purchases for that content approved by Apple before using them in the Publishing Center.