You can see that in "DotNetNuke Installation Guide.pdf", page 20.
"The fourth setting (“UseDnnConfig”) which is also set to true by default, tells
DotNetNuke whether to read the current Database version from the dnn.config file in the
/Install folder. As upgrades do not happen on every Application Start using this file can
reduce the number of Database hits, and improve performance. At the end of
Installation/Upgrade the current version is written to this file. If the Assembly Version
is the same as the version in this file, nothing will happen. If it is different then
AutoUpgrade will confirm that the Database Version is indeed different and proceed
accordingly."