It sounds like you have both versions of Foo.dll installed in the gac.
Check out gacutil to remove the old one.
If it is just a file reference, then in each project, open 'References' and right click on 'Foo' and choose properties. It will tell you in the resulting properties window information such as version.
Usually the best approach to dependencies like this is to have a separate folder at project level (but not part of the actual solution) called 'Dependencies' with these kinds of DLLs in them.
I'd also consider some build automation on your server (TFS = Team Build, SVN = Cruise Control, etc) that will copy the right version of an assembly into the bin folder prior to build.
There's lots of ways to go with assemblies and its easy to get confused over which one is being used by various applications. Its worth spending some time solving this problem once in a templateable manner that can apply to all future projects.