This topic came up in a WCF training session (i.e. ObjectSharp's WCF course) I am currently delivering so I wanted to post a few references on the subject here:
The first is "Designing Extensible, Versionable XML Formats" by Dare Obasanjo
http://www.xml.com/pub/a/2004/07/21/design.html?page=1
The second, slightly more academic treatment is "Extensibility, XML Vocabularies, and XML Schema", by David Orchard, an extensibility guru who has much to say on the topic:
http://www.xml.com/pub/a/2004/10/27/extend.html
And then finally a series of writings by Tim Ewald which are chock full of extremely powerful Versioning advice:
First his "Services and the Versioning Problem" article in the MS Architecture Journal:
http://msdn2.microsoft.com/en-us/arcjournal/bb245674.aspx
And then a series of blog entries:
http://pluralsight.com/blogs/tewald/archive/2006/04/14/21733.aspx
http://pluralsight.com/blogs/tewald/archive/2006/04/25/22704.aspx
http://pluralsight.com/blogs/tewald/archive/2006/05/05/22961.aspx
http://pluralsight.com/blogs/tewald/archive/2006/05/05/22963.aspx