Currently Being ModeratedJul 31, 2012 5:29 PM (in response to joeonthego)
Apple hasn't posted much besides this: OS X Lion: About Auto Save and Versions.
There are some independent reviews such as: Mac OS X 10.7 Lion: the Ars Technica review. Scroll down to the contents for the section on Document revisions.
Bottom line -- because it only saves the previous contents of changed "chunks," you can't alter an existing Version; just make a new one.
Note that the actual file contains only the current contents; all the versions info is in a hidden, protected database. So when you move, copy, back-up, or send a file, only the current version goes with it.