How does "sharing" of purchased apps work on iPhone and iPad?
There isn't a limit to this (or there isn't yet a limit that is imposed by Apple); you should be able to install iOS apps that you purchase on all your iOS devices (obviously using the same Apple ID).
From the Apple iTunes Terms of Service:

APP STORE PRODUCT USAGE RULES
(i) If you are an individual acting in your personal capacity, you may download and sync an App Store Product for personal, noncommercial use on any iOS Device you own or control.