I'm in the uk and not completely sure I get which is my best royalty option? I want to get to the widest audience and earn as much as possible of course. I'm sure that's what we all want but why is there such a big percentage divide between the two choices??
The 70% royalty is clearly best. If you price your books at, say, $5, then you only have to sell a tenth as many as you would pricing them at 99 cents with the 35% option. Unless your books are so poor that only one in ten people would be willing to spend that much on them (in which case why write at all?) or you're selling only short stories, you should be pricing high and taking the highest royalty possible.
As for why Amazon have chosen to set prices that way, it's because they think that overall they will make most money if they sell ebooks for between $3 and $10. Any more than that and people complain, any less than that and it's hardly worth their while selling them. So they have the two royalty options to encourage people to sell for between $2.99 and $9.99 .