I’m working on an article for IntranetJournal about the way that SharePoint actually uses meta data (fields) in a document library and as I was crawling through the details it occurred to me one of the reasons why SharePoint has to create a new version when you update the properties of the file. Many people have wondered why this causes a new version to be created — including myself. However, I believe that I’ve stumbled across the answer — Because it *IS* a new version in some cases.
In the case of Office documents, the document itself gets updated to reflect the new properties. You can see for yourself by checking File-Properties-File Properties on the file.
It’s also storing the previous properties off if you needed to restore them, even if there is no way to see them. (It’s not just recreating them from the properties in the document because it has the behavior of restoring the properties even for non-Office documents.)