I know from the .NET perspective that an assembly with a version of 1.13 is considered a newer release than version 1.2 because each number in the version is evaluated individually. However from a numerical point of view 1.13 is < than 1.2.
The issue comes down to readability when publishing updates for customers. From .0 to .9 it's all the same but at .10 you have to differenciate. So, do you limit the number of point releases to 9 and then increment the major version when you reach .9?
Please don't assume that the end user has an understanding of typical development version numbering schemes.
Update:
Don't think of it like a decimal number. The (.) is a delimiter between the different fields. What each field means (for example):
MajorRelease.MinorRelease.BuildNumber
Absolutely! That'show I see it when I look at version numbers. But it's not how your average Joe reads the text '1.13'. I guess as programmers it's easy to project our understanding on our users. That's why I'm interested in responses on experience with confusion on the numbers. It may not be a real issue, or perhaps it's just been ignored.
Update 2: Response to "provide documentation" or "explain it to users" type solutions: they don't work! :) If you have to explain a version number to the user you've already made it more complex than it needs to be. While the primary audience for a piece of technology may be developers in many companies the actual procurement and management of software is handled by secretaries and clerical staff who have no development or technology background at all. If their manager asks them "Is there a new version available from 1.9" and they see "1.11" they may not register it as a newer release.