Hi Preeto,
The ability to manage versions is one part of the Document Lifecyle/Workflow feature set of the 2007 Office products family.
That part does require the use of the Sharepoint products, but some of that comes from Windows Sharepoint Services 3.0 and some from
the Office Sharepoint Server. It isn't a menu choice as it was in File=>Versions in prior Word editions.
You may want to use the link below to followup on the details with the Sharepoint folks.
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Hi Bob,
Is versioning and document life cycle(DLC) the same thing? and it
is a feature available in Share point server ,right? >>
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Please let us know if this has helped,
Bob Buckland ?

MS Office System Products MVP
LINKS
A. Specific newsgroup/discussion group mentioned in this message:
news://msnews.microsoft.com/microsoft.public.sharepoint.general
or via browser:
http://microsoft.com/communities/newsgroups/en-us/?dg=microsoft.public.sharepoint.general
B. MS Office Community discussion/newsgroups via Web Browser
http://microsoft.com/office/community/en-us/default.mspx
or
Microsoft hosted newsgroups via Outlook Express/newsreader
news://msnews.microsoft.com