So is this feature only applicable to games on CDs or DVDs? OR does it also apply to Steam games as well?

The FAQ at the bottom of the Reclaim Your Game page should cover that info.

Hope this helps.

And finally there is Witcher Backup for Witcher 1+2

I'd like to really emphasize the additional note part there to the OP and other readers, as people come to the site and see GOG Connect and easily mistakenly think just the first sentence is true, then wonder why they can't sync their entire Steam collection to GOG for free.

GOG Connect is a promotional feature which GOG uses from time to time on occasion usually during major sales promotions about 3-4 times per year, in conjunction with publishers that wish to be a part of the promotion by allowing GOG customers to obtain free copies of a limited number of games they own on Steam which are taking in the short term promotion during the sales promo. These GOG Connect promotions usually last anywhere from a day to the length of the sales promo then end.

It's important to note that normally, the majority of the rest of the year there are no game promotions like this on GOG Connect so people shouldn't expect any games to be available on Connect except during major seasonal sales or other special promos that might arise throughout the year.

In short, it's not an ongoing every day free games from Steam thing. :)

In theory only for retail editions, however some Steam game come with a CD key (example) that could be used to redeem the game on GOG.

I read it but I was hoping there were exceptions that they just didn't mention in the FAQ.