Simple - in previous versions of windows, it was possible to have multiple applications all trying to access the same shared library. No problem there, that's why they are shared. the problem comes when different apps were trying to access different versions of the same assembly from a central location. Providing all the later versions of the dll are backward-compatible, and that you have the latest version there should be no problem, but if you install an app that requires v2, and then install and app that requires (and includes) version 1.x, you may find the first app stops working (because the v2 dll has been overwritten with v1.x).
Recent versions of windows are capable of storing multiple versions of a dll, and supplying the correct one on request.
