Should I list a sub-par paper on my CV? I am an undergraduate who will be applying to graduate school in the fall.

In my academic career, I have published 1 paper in a not so well known journal (International Journal of Applied Pattern Recognition) and I believe the paper is sub-par, especially compared to the rest of my CV. Should I still list it in my CV when I apply for graduate school? 

I am worried that the paper might stick out like a sore thumb in an otherwise adequate list of experience and accolades. But on the other hand, since I do not have any other papers, this might be an additional evidence of research experience, especially since I published it at the beginning of my sophomore year (I doubt the admissions committee will look too deeply at the dates and come to that conclusion though..).
Perhaps your dim view of you paper isn't because it isn't good, but rather a reflection of your growth in the field since you wrote it. You have more knowledge and higher standards now. Your old work may seem naive now, though it didn't then, and it might not to other readers. 

Yes, I'd list it in grad school applications. As you say it shows some understanding of what research entails which is pretty rare among undergraduates in some places such as the US. 

And for most people, your first paper is never your best. It would be a disaster if it were. 

Many writers, not just scholars, look back on their early work with a bit of horror. "How could I have been so bad and still succeed?"