>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
I am having some logic seperate from myuser interface layer and compile into DLL.Once I recompile/update my DLL (with version increased), I am required to re-compile my Application EXE too, why?
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Check out the Project Properties | Component tab of the DLL. My guess is that you have "No compatibility" checked (I think this is the default)... try project or binary compatibility.
-- No Compatibility: requires EXE's using the DLL to be recompiled every time you make the DLL anew...
-- Project compatibility:requires you to recompile the EXE's running the DLL whenever you have changed the public interface of the DLL by changing expected parameters in existing methods or adding or deleting methods.
--Binary Compatibility (probaby the best choice): only requires a recompile of the EXE if you change existing methods. In other words, you can add new methods and not require a recompile of EXE's still using the DLL (as long as, of course, you don't want to use the new methods).