iTunes has found purchased items on the iPhone that are not present in your iTunes library

My iPhone was running low on space the other day (less than 1GB free and it was starting to get slow and sluggish) so I wanted to do a little house-keeping and delete some stuff that I no longer needed.  I actually had the iPhone plugged into my PC at the time and I was going through and deleting app using iTunes, rather than directly on the iPhone.  (Sometime when you delete an app from your phone, it will still remain in iTunes.)

So after I deleted a bunch of apps, i hit the Sync button in iTunes.  Then this error/warning message popped up. "iTunes has found purchased items on the iPhone "Jason's iPhone" that are not present in your iTunes library. Do you want to transfer these items from this iPhone back to your iTunes library? If you do not transfer these purchased items to your iTunes library, they will be removed from the iPhone."

So it's saying, "Hey, you have things on your phone that aren't in iTunes - do you want me to copy them from the phone back into to iTunes so you don't lose them?"  But in this case, NO, it didn't want to do that. I was trying to delete apps from iTunes AND my iPhone.  So I hit "Don't Transfer".  Now the apps that I had deleted in iTunes were also deleted from my iPhone and I was able to free up a good bit of space.  And my phone seems to be operating a little quicker too - I was down to a few hundred MB of free space and now I have several GB free.