Versioning if turned on allows you to edit an asset, upload a new 'version' (e.g. an updated logo), then save this. Now the latest version will be visible, and the older one hidden from view. Doing this is quicker than deleting the asset, then uploading a new one (as you would need to enter in the metadata again). It also allows you to see the history of an asset.
Configuration options for this functionality in the settings file are as follows (you can set 'true' or 'false' for each):
# Can versions of existing assets be created?
# Can previous versions of assets be edited or deleted?
# Should there be an option to return previous versions of assets in a search?
# Should the option to return previous versions of assets in a search be restricted to admin users only?
program files/Apache foundation/...(if using Windows)