For whatever reason (I smell lawyers), DRM-free purchases (“iTunes Plus”, cheesy har-har) are not enabled by default in iTunes 7.2. In fact, they’re positively buried:
hat tip: SteveX Compiled
addendum: Looks like they placed iTunes Plus links more prominently in the store interface, so you no longer have to dig for them. Thanks, Apple.
You are in the hall of the mountain king.