The full error will read like:
Your backup is from a different version of Windows SharePoint Services and cannot be restored to a server running the current version. The backup file should be restored to a server with version '126.96.36.19921' or later.
Most probable cause for this would be that you took backup from a sharepoint installation which is latest or is updated using a service pack and where you are trying to restore it (possibly in a different machine/ environment) is lacking the service pack.
In my case backup was taken from MOSS installation which had MOSS SP2 installed but the target machine had no service packs, hence I installed WSS service packs then MOSS service packs and then the error disappeared!