Framework versions question

I assume that backwards compatibility is built in? i.e. a .DLL compiled for v3.5 should be ok to use with a v4 project?

I ask because I'm about to play with some Open Source widget and their downloads page provides versions for .net 3.5 and 4. By the sound of it, they're not using anything specific to v4 (otherwise how would they produce a 3.5 ver?) ... so why provide both?
There is no forum for their project, or I'd ask there, but I'm sure you guys will have an answer :)

Thanks....