Versioning of Assembly

Simply, versioning is just number to the dll's to identify the correct version.
Ex: Say you're creating an assembly for first time and you're versioned it as "1.0.0.0".  And it has only the print method.

After a week, based on the requirement, if you've added a method ReadUserInput() method and you delivered it with the version of "1.1.0.0".
You've deployed both the dll in GAC. When you want to use the latest dll you can refer the 1.1 version dll and you feel that your application is not compatible with the latest version then you can refer the 1.0 version dll.

Think,if you're not maintained the version number then always you'll have latest version dll. Your application might broke becasue of the new dll and you don't any option to go back with old dll unless you've the copy of the dll.

Consider, you've published dll as product, if can't say your customer is using the latest dll or the old dll.

To overcome these kind of issues, in .net, we're using versioning concept.
To know more about this, http://msdn.microsoft.com/en-us/library/51ket42z(v=vs.100).aspx
Hope this helps.