iCloud Sync after a re-format

Here is my problem:

I have a lot of apps on both my iPad2 & iPhone4. I also had them on my iTunes on Windows 7. I recently re-formated my computer. Then I installed icloud desktop. Got everything up and running. When I plugged in both devices to my computer, itunes asks to delete everything on my devices. So why doesn't icloud work.

According to the keynote back in 2011, the computer now is a device, so technically any apps on my device should technically be auto downloaded onto my computer. Right now this only works if I get a new app. My old (current) apps don't get auto downloaded. WFT.