I have an app that I love whose owner went out of business after removing the app from the store. I purchased it for my 3G,and since then I've had to manually transfer it from iTunes, until I switched to iCloud backups which have muddled the issue for me... Anyhow it shows up in "purchased" with an "open" button if it's on the device, and (my recollection is that it) just shows up with no button and no download icon if it is not.