How to know Magento version?

There are two ways to see what version you are using.

Login to the Magento admin panel and look in the footer, you should see the following: Magento ver.x.x.x Where X.X.X is the version number.
If you only have access to the source code, you can see what version of Magento the source code is based on by opening app/Mage.php and looking for the getVersion() method