1) 'G' - is a constant character referring to the word Generation
2) 'nnnn' - is a Generation number consisting of four digits. This number starts at 0001 and goes to 9999 before repeating (the only time a lower number means a newer data set chronologically)
3) 'V' - is a constant character referring to the word Version
4) 'nn' - is a Version number consisting of two digits. At 00 this number starts at 00 and goes to 99.
The Version number default is '00'. It is extremely rare for a Version greater than '00'. Version numbers are used when you wish to keep the same generation number but also want to have different versions.
An example of this situation might be when 'G0006V00' contains data for your personnel file that has old department numbers, however 'G0006V01' contains the same data with new department numbers.
One point to keep in mind and it's important: Only one version can exist for a generation in a GDG at any given time. I'm not sure if the previous version is deleted, but I do know that it is removed from the GDG. Surely if the GDG was created with the force or purge option it will be deleted.