Enabling versioning on documents

WSS 3.0 does not initially come with document versioning as Office 2007 Server does. You should enable it, this is how:

1. Open your site (eg.http://sp2007test/default.aspx)
2. Click on Site Actions -> Site Settings
3. Under Site Administration click "Site Libraries and Lists"
4. Click the "Customize ..." link to customize your library.
5. Click Versioning Settings
6. Choose the appropriate options you like.

That's it.Now you should see the "Version history" option in the document drop down list.