SQL Server 2012 backward compatibility for backups with 2008 I have a number of clients with SQL Server 2008 and that's what I have here on my server too. I use backup files to send databases back and forth between clients and at my office.

I have read that when you create a backup from SQL Server 2012 there is no way to restore it onto a 2008 instance. I assumed that the compatibility level would take care of this problem, but it doesn't. Therefore, I am at a loss as to how to upgrade. Other than upgrade all my clients all at once, which is impossible, I can think of no clean way to do this.

I have the need to send a database to a client as well as receive a database from a client. This is my first version upgrade on SQL Server, so I'm new to this problem. Any ideas on how to proceed?
There's two things involved here: the version number of the file, and the compatibility level.  When you attach a database to a newer major version (like from 2008 to 2008R2, or 2008R2 to 2012) the database version is changed permanently, and you can't attach that database to an older version again.

The compatibility level is for parsing old-school deprecated T-SQL that used to work in older versions of SQL Server.  It doesn't change how the data is stored on disk.

To give the database to someone on an older version of SQL Server, you'll need to export the data and import it into another database.  Tools like Red Gate's Data Compare are helpful for this.