The backup of the system database on the device <backupPath> cannot be restored because it was created by a different version of the server <version> than this server <version>

While I was trying to restore the backup of master database taken in SQL Server 2008 on to an SQL Server 2008 R2 instance, I was presented with the below error.

Msg 3168, Level 16, State 1, Line 1 The backup of the system database on the device D:\Backup\master.bak cannot be restored because it was created by a different version of the server (10.00.1600) than this server (10.50.1600). Msg 3013, Level 16, State 1, Line 1 RESTORE DATABASE is terminating abnormally.

This Means that we cannot restore the system databases (master, model or msdb) between different versions.

Using the below commands, we can verify if the build versions of both the instances are same or different.

--To get the current Instance version
SELECT @@SERVERNAME AS ServerName, 
    SERVERPROPERTY('ProductVersion') as CurrentSystemVersion

--To get the version of instance where backup is generated
--Look at the columns "SoftwareVersionMajor", "SoftwareVersionMinor", "SoftwareVersionBuild"
RESTORE HEADERONLY 
FROM DISK = 'D:\Backup\master.bak'

In order to successfully restore the system database backup from a different instance, then the build versions of the both the instances should be the same.
More information at http://support.microsoft.com/kb/264474