Document ONE enables users to create revisions of documents (for minor changes between iterations of a document) or to create versions of documents (for major changes between iterations of a document).
By creating a revision of a document you essentially take a "snapshot" of that document at a particular time. You can't edit revisions, but you can always refer back to them if necessary to see what your thinking was at that particular point in your document's history.
Revisions are particularly useful if you want to invite another user to make changes to a document that you have created, but want to keep a copy of your original document in case you don't agree with some of the changes that this user makes.
In Document ONE you must complete a document (i.e. make it non-editable) before you can create a new version of it.
Your new version will contain a link back to the most immediate previous version, which in turn contains a link to the latest version - so anyone who opens any version of your document will be able to clearly see whether an earlier or later version of that document exists.