(I didn't mean to imply it was intentionally misleading.)
I've been running iPhone 3.0 (have had the same device for a year) since it was seeded to developers and have never seen this message. There have been plenty of occasions where I've redownloaded an app that I've paid for already without trouble.
I think the language "this device" is very telling. Perhaps you are using the same device, but a different device identifier than the one used for the original purchase (even if the app itself is free, it's still a purchase) is being sent to iTunes for the purchase that raises this message.
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(I didn't mean to imply it was intentionally misleading.)
I've been running iPhone 3.0 (have had the same device for a year) since it was seeded to developers and have never seen this message. There have been plenty of occasions where I've redownloaded an app that I've paid for already without trouble.
I think the language "this device" is very telling. Perhaps you are using the same device, but a different device identifier than the one used for the original purchase (even if the app itself is free, it's still a purchase) is being sent to iTunes for the purchase that raises this message.