How does assembly versioning work?

Each assembly has a version number called the compatibility version. Also each reference to an assembly (from another assembly) includes both the name and version of the referenced assembly.The version number has four numeric parts (e.g. 5.5.2.33). Assemblies with either of the first two parts different are normally viewed as incompatible. If the first two parts are the same, but the third is different, the assemblies are deemed as 'maybe compatible'. If only the fourth part is different, the assemblies are deemed compatible. However, this is just the default guideline - it is the version policy that decides to what extent these rules are enforced. The version policy can be specified via the application configuration file.