How do you handle work-for-hire requests?

If a client says this to you: We expect to wholly and completely own the program, the source code for the program, and any associated products such as artwork used to produce the final product. Aside from the fact that I am creating a web app, using lots of open-source technology (which obviously they can't own), what does that statement mean really? If I write a nice, elegant, custom method (say a before_filter) that solves a particular problem in this project (one that I have never encountered before, but I would like to use in the future), by agreeing to this clause does it mean that I can't use that custom method or any other original works I create for that project? This seems like a trap all around. How do I avoid getting myself handcuffed and prevented from continually improving my craft by using work I have done in other projects and making it better?