What is API Versioning in Salesforce?

Hi,

Adding some more points -

A key principle to understand is that whilst SFDC may release version 28 of the API, the deployment logic associated with version 27 is still available for use as long as you force the API to use version 27. In Eclipse, using the Force.com IDE the version of the API being used is specified in the ./src/package.xml file. Open it in a text editor scroll to the bottom and you will find a line similar to:

<Version>28.0</Version>

It important to note that your version of Eclipse may not be able to deploy Meta Data files with an API version which is higher than the one supported by your Force.com IDE plug-in. So if you are using Eclipse with Force.com IDE version 27, you may not be able to deploy Meta Data files with API version 28. The latest version info on the Force.com IDE and how to upgrade can be found here.
This concept may lead to utter confusion and numerous errors if the teams are not consistent with which API version they are using.

Let’s look at an example:

•   Mary is an Apex developer. She’s been using Eclipse for about 6 months and the Force.com IDE API version she is using in Eclipse (package.xml) is version 27.
• Bob joins the team – installs Eclipse, installs the force.com IDE and refreshes his environment from a recently released SFDC org which is running Summer 2013. His package.xml file will therefore contain API version 28.
• Mary and Bob are working on the same project and share the same Git Repo. Mary is working on an Apex Trigger: Account_Update whilst Bob is working on a trigger Contact_Update

Hope this helps.