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Android market purchases are tied to the email address of the primary account of the device. So if you buy another phone and use the same gmail (it's actually a little more than that, but that's the common case) address, your purchases will be preserved and honored. If you buy another phone and use your aol or work address, it doesn't know that you're the same person and your license doesn't transfer.

 

I recently did a factory reset on my Droid. (gulp) Logged back in. It noticed that everything I'd ever downloaded from Android Market (including purchased apps) was missing and pulled them down again. Apps pulled from third party sources had to be manually re-installed. Another reason to use the Android Market, IMO.

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