I am an Amazon and Mozy affiliate.
The person at the Genius Bar told me that I should of been able to re-download my paid apps free of charge.
Unfortunately, I searched for an paid app that I previously had, but the app had an upgraded version, which meant no free download. So $2.99 later, I l learned the hard way that it was “not” an application I had before.
So if misfortune befalls your iPhone or iPod Touch and you need to reinstall everything, please take heed of my tale.