SOLUTION

Solutions exist so that a set of customization can be purchased, shared or otherwise transported from one organization to another. It is a container for a set of components. 

Default Solution

When you customize the CRM system directly, you work with a special solution called the Default Solution. The Default Solution contains all the components in your system. Creating solutions is optional. You can customize your CRM system directly without ever creating a solution. You can only export your Default Solution as an unmanaged solution.

If a new solution is created, it references the components in the default solution and not copies of the components. So a custom or new solution is just a wrapper of the components of the default solution.

Managed Solution

A managed solution are used for distribution of solution. All the components of the solution are removed by uninstalling the solution. To create a managed solution, you choose the managed solution option when you export the solution. If you create a managed solution, you can’t import it back into the same organization you used to create it. You can only import it into a different organization

Unmanaged Solution
These are solutions used during development because they are customizable. When imported into an organization it over-writes the changes or custom development/customization of the latest solution in the organization. 

Versioning Solution
There are four numbers used separated by dots. e.g 1.2.3.4 
Sequentially, they are named (MMBR)

• Major version number
• Minor version number
• Build number
• Revision number

The first two numbers are updated when a new feature is added to the solution and the last two when a bug is fixed in the solution.

Customizing Solution after Exporting

It is possible to customize Managed solution after exporting the solution because by default Microsoft Dynamics CRM set "Can be Customized" property in the Managed Properties of every solution to true. If you want to restrict access to custom adjustments of the solution you have to set this property to false