So the US version isn't compatible with the rest?

[MeatEtr 0]

At least until the 1.07 update is ironed out. Is this correct? Wanted to play my friend that has the US version, as I have the Euro version. Is there any other way these 2 diff versions can play each other?

[frederf 0]

Correct.

Rest of world is up to 1.05

America is up to 1.06

Until 1.07 they cannot play together.

You can play together using 1.07beta1 or 1.07beta2 though.