C:\Inetpub\dir1.1\resources\foo.dll (i.e. 1.1 version)
C:\Inetpub\dir2.0\resources\foo.dll (i.e. 2.0 version)
You want to add the latter (the 2.0 version in dir2.0) to your project references but, after you do so and you go back and check the properties of foo.dll in your project you see that it is pointing to the former (the 1.1 version in dir1).
Check "Project Properties", the "Reference Paths" tab values and remove the paths to any unused directories. These act similarly to path variables and if foo.dll is found in one of them then that is the file that will be used regardless of the fully qualified path that you explicitly specified.
(specific to VS 2005)