When you release a newer version of your application, on update the android system identifies from the package name and version number, that the user has an older version installed. During updating not all data of the previous version is overwritten, databases, preferences, previously downloaded/created files on sdcard or internal storage remain unchanged. If there are any incompatibility with the old version of these, is must be taken care of.
First of all, files on the external storage can be lost or corrupted due to many other reasons, so version incompatibility is just one more reason to check those files before using them.
However the internal storage is theoretically not modified by external sources, if there are version incompatibilities, you have to check the state of this files too.
