Files saved in the current version of SolidWorks cannot be opened in older versions of SolidWorks. If you try to open a SolidWorks 2011 file using SolidWorks 2010, for example, you will get this error.
The recommended method for opening files from a future version is to Save As a Parasolid file (any version). Drawings can be saved as DXF/DWG (older version).
Compatibility between Service Packs is not an issue. SolidWorks developers limit the scope of software changes in Service Packs to ensure bidirectional compatibility. Only major versions (annual releases) are able to have significant development changes which would prevent backwards compatibility.
SolidWorks can open files from previous versions. For example SolidWorks 2011 can open a file from SolidWorks ’99 with full functionality.