>>>I have a back created on SQL 2008, and I'm trying to restore it on another machine also running 2008.
>>>
>>>I'm getting:
>>>
>>>

>>>System.Data.SqlClient.SqlError: The database was backed up on a server running version 10.50.1617. That version is 
>>>incompatible with this server, which is running version 10.00.2573. Either restore the database on a server that 
>>>supports the backup, or use a backup that is compatible with this server. (Microsoft.SqlServer.Smo)
>>>

>>>
>>>I was able to restore it to another PC running 2008 R2, but not this one. Is there any way to restore this DB on this PC?
>>
>>The version the backup is from is SQL2008 R2. The server you tried to restore to is NOT R2. They do not play nice in backup/restore.
>>
>>Either upgrade the 2008 server to R2 or copy the database from the server you did restore the backup to.
>
>1) Is there an 'upgrade' or are we talking a full install?
>2) Will I still be able to access all the other DB's currently in 2008?

Yes - you can upgrade (it is a typical SQL install package though - it is SLOW).

Yes - you will still be able to access all your 2008 dbs.

If you are nervous about it, you can install another instance of SQL (any version) alongside what you already have.