Lost all apps after update

Ok, so here's the deal... I'm not really familiar with updating an iPhone. I got an iPhone 4 a few months ago, and outside of the initial setup, I've never really synched it with iTunes.

Anyway, I connected the iPhone to a new computer, authorized the computer, did a backup, and also used the "transfer purchases" option (I guess that syncs my apps?)

However, when clicking "Download and Update" for iOS 5.0, I got the following error message:

"Updating to iOS 5.0 will delete all of the apps and media, including iTunes Store purchases, on your iPhone. To preserve your content, apply this update on the computer where you sync apps, music, videos, and photos. Updating on this computer will only preserve contacts, calendars, text messages, and other settings. Please do not interrupt the update, which may take an hour or longer to complete. iTunes will verify the software update with Apple"

For some unexplainable reason, I ignored that message and continued with the update Right as the restore was finished after the update, my iTunes froze too.

After I went through the setup options, I looked over the phone. Everything is still there (photos, contacts, texts, etc), however, all the apps except one were gone.

Now, I can see all the apps under the "Apps" section of the iTunes library. I hit the sync option, but they don't seem to be synching. Also, I installed Words With Friends from the purchased apps section on the iPhones, and all my games reappeared without me logging in, so I assume the app settings are still good, just the apps themselves aren't appearing.

Is there a way I can sync all the apps back onto the iPhone without having to redownload (and reorganize) each one?

I logged in, but that doesn't seem to have done anything... I do see all the apps that I had installed on my iPhone, but they don't seem to want to go back on the phone

BTW: I think I did the backup of the phone BEFORE I hit the "transfer purchases" option on the iTunes, so maybe that's what caused the problem in the first place?

I don't see a spot for ticks?

Here then? I still don't see it. Sorry I'm a newb

Genius! Thank you

Does anyone know why I was getting that error I highlighted in bold in the first place from iTunes? Is that because I did a backup before I did "transfer purchases?" I want to make sure I don't lose my folder arrangements next time there's an update.

My app data was all there after I resynched.

In fact, my app data must have been there once the phone was restored, because like I said, I installed Words with Friends manually and I was logged in already. I assume the app data is stored somewhere separate from the actual apps themselves.