My view of NFS protocol versions
There are three major versions of the NFS protocol that you may encounter or hear about, NFS v2, v3, and v4. Today I feel like running down my understanding of the broad and general differences between them.
NFS v2 is the original version of NFS. It dates from 1985 and boy does it show in the protocol. NFS v2 is obsolete today and should not be used, partly because it's a 32-bit protocol that doesn't allow access to large files. You might wonder why we care about NFS v2 in the modern era, and the answer to that is that a great deal of practical system administration folklore about NFS is based on NFS v2 behavior. Knowing what NFS v2 did can let you understand why people still often believe various things about NFS in general (or the NFS implementations on specific Unixes). NFS v2 was originally UDP only, although I think you can use it over TCP these days if you really want to.
NFS v3 is the 'modern' version, specified in 1995 and adopted steadily since then. Besides being 64-bit and so being able to deal with large files, it added a bunch of important performance improvements. Support for NFS over TCP was generally added (and made to work well) with NFS v3, although systems made it available for NFS v2 as well. NFS v3 is fundamentally the same as NFS v2; it could be described as 'NFS v2 with obvious tweaks'. NFS v2 environments could generally be easily moved to NFS v3 when the client and server support materialized and they'd generally see better performance.
For most people, the biggest performance difference between NFS v2 and NFS v3 is that in NFS v2 all writes are synchronous and in NFS v3 they're not necessarily so. This is a sufficiently complicated subject that it needs its own entry.
NFS v4 dates from the early 2000s and is a major change from previous versions of NFS. The core NFS protocol got much more complex (partly because it swallowed a number of what had previously been side protocols for things like mounting and locking) and a bunch of core assumptions changed. Most importantly for many people running real NFS servers (us included) is that NFS v4 is (primarily) designed to be a real distributed filesystem and is often described as requiring this. However you can apparently run it with traditional NFS 'we trust clients' security if you want and things may even work decently that way these days.
(NFS v4 is apparently not supported on OpenBSD, although it is on Linux, OmniOS, Solaris, and FreeBSD.)
Initial NFS v4 server implementations put various restrictions on how you could arrange your NFS exports; for example, they might have to all be located under a single directory on the server. Current NFS v4 server implementations on at least Linux and OmniOS seem to have removed this requirement, although writeups on the Internet hasn't necessarily caught up with this. As a result it's now common for such servers to export everything for both NFS v3 and NFS v4 if you don't do anything special.
My personal experience with NFS v4 is minimal. We very much don't want its security improvements and nothing else we've heard has sounded particularly compelling, so we run NFS v3. The few times I've wound up using NFS v4 it's been because a new out of the box server (still) allowed clients to do NFS v4 mounts, the clients defaulted to it, and the mounts had odd things going on with them that caused me to notice this. I suspect that we could make NFS v4 transparently equivalent to NFS v3 for us with more configuration work, but we haven't so far and I'm not sure we'd really get anything from it.
(Because I've primarily associated NFS v4 with its (undesired for us) security improvements (partly this is because what a lot of people talk about), I've historically had a bad view of it and modern NFS protocol development. This is probably a mild mistake by now.)
(Note that going to NFS v4 with
AUTH_SYS authentication wouldn't
get us around the 16 groups limitation.)