Swagatam,

It seems you have set your ipod settings to auto-sync, which means every time you connect your ipod to your computer it replaces all the songs you have on your ipod with all the songs you have in your itunes library. When you buy songs off itunes, the files remain on your harddisk. If you delete those songs from your computer you won't be able to retrieve them again. Your iTunes library is not like your virtual harddrive which you can access from anywhere. So, when you formatted your computer you probably deleted all the music files you had on your computer. And when you connected your ipod, the songs you already had on your ipod but not on your computer got deleted as well since your ipod synced its library with the iTunes library. I tend to delete songs from my hard disk once in a while so I usually have my ipod on manual-sync rather than auto-sync. That ensures that my songs on my ipod remain there even when they get deleted from my iTunes library.

You said you bought those songs from iTunes. It's your choice if you want to spend money and be safe. At least iTunes is safer than limewire which is more risky for your computer. There is a much bigger chance of getting spywares, trojans and viruses through limewire. You can also rip songs off CDs.