Hi Paul,
Jesse from the Guru Team here.
While there isnt an app that will change product types based on inventory level, you can setup a smart collection that will look for all products that have an inventory level of 1.
http://docs.shopify.com/manual/your-store/collections/add-automatic-collection
Feel free to reach out at any time if you have any other questions.
http://docs.shopify.com/support