Update: Woops! this was a store update 2 weeks ago, not 4.3. Sorry about that
A cool new feature that is now in 4.3 is the ability for the App Store to check your account for applications that aren’t yet installed, but have been bought in the past. The App Store will now show “INSTALLED” rather than the app’s dollar value and then displaying the message “You have already purchased this item. To download it again for free, select OK.”
This feature appears to be exclusive to the iPad iOS only. iPhone 4.3 still exhibits the previous behavior.