Major and Minor Versions
You can configure versioning to use only major versions. In this case the versions are inetgers, ie. 1, 2, 3, 4. Major versions are always visible to anyone with permission to an item. In other words, if you edit a page and check it in, everyone will see the new version. You can use major versions without checkout if all you want is history and the ability to roll back.
Minor versions are also called draft versions. When you use major and minor versions the version number becomes a decimal, ie. 1.0, 1.1, 2.0, 2.1, 2.2, etc. The benefit of draft versions is that you can control the visibility of draft items. In other words, when you check in a draft version, people who are not authors or approvers (visitors to the site) still see the previous major version. Draft item security is often augmented with an approval process or workflow