This morning I was in the process of backing up my iPad on iTunes. When I did that, I got this message....
"There are purchased items on the iPad that have not been transferred to your iTunes library. You should transfer your items to your iTunes library before updating your iPad. Are you sure you want to continue"?
How do you transfer those purchased items to the iTunes library?
Did it not offer you the transfer purchases option as part of the dialog?
If not you can manually do it by right clicking on your device while it's connected to iTunes.
I sometimes get this message. Tapping on yes to continue downloads the app normally and the settings are preserved AFAIK, but the downloads are taken out of the folder in which they were and placed in the back as if they were new downloads. I haven't noticed any other problems.
Usually the downloads are transferred automatically on sync.