What does it mean Setup as new device?

I am attaching my iPhone to my new computer via iTunes.  I just want to setup a new sync playlist.  iTunes is asking me to restore from previous backup or set up as net device.  Afraid to set up as new device....does that mean it is setting my iPhone up as a new device....or just setting it as a new device on that installation of iTunes??  I don't want to wipe out my iPhone.....

It means it is a replacement handset, it may be new, it may be refurbished. If you are unwilling to accept a refurbished model since you just bought yours either ask to speak to a manager or return yours and buy another one.

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