I think you're talking about the setting that allows the phone to auto download a app. Say if you bought it on iTunes or on a iPad. It will auto download, switching the 3G to on will allow this over 3G. With out it on it will wait until it has a wifi signal.
I'm not sure it says use cellular network to download purchases I checked off thinking I would only be able to purchase apps on wifi but I'm able to on 3g as well.
It's designed for auto download so you know your download isn't consuming data. If you MANUALLY download an app it assumes you actually want the app or else you'd wait till you were on wifi.
I think it's designed well, just maybe not clearly detailed enough.
It can auto download if you download an app from your computer as well. You don't need a second device. Well, I guess a computer can be considered a device.