I have decided to exchange my Droid handset at the Best Buy that I got it at. My question is: What happens to paid apps? Will I need to pay for them again when I reinstall the apps on the my new handset?
By using google checkout I believe the apps get recorded to your user name. Simply log in and re-download. The again it can't be that simple because then everyone could just log in and download for free.
When you get your new handset, you will have to repurchase all your apps only the second time you purchase them, they charge you double. Plus when they refurbish your old handset and give it to someone new, he will get all your paid apps for free and when he buys new apps, they will be charged to your credit card.
It's better to just to burn and then bury a defective handset in the back yard.
I can confirm that. I had to take my phone back and get a new one. - If you buy apps from the Market they get tied to your gmail account. All my apps got automatically reinstalled when I logged on the new phone.