Openssh 4.2p1 and Openssh3.6.1 compatibility

we recently were requested to upgrade our Openssh to the latest version which was SMCossh421
This caused a problem with some Applications in the system. I recently received a mail to this effect i.e...

"we have concluded that ... is not compatible with this version of Open SSH. The reason being, SFTP client of ... uses an option -b of sftp command for batch file processing. This option has been removed in openssh 4.1. In the absence of this option, SFTP client would not be able to work properly in the system.
We therefore suggests that openssh 3.6.1 p1 should additionally be included in the System as ... is dependent on it. I suppose the package names of 3.6.1 and 4.1 are different so they can co exist in the system. "

1) Is this correct?
2) Is it also true that 4.2p1 version has not got this (batch handling) option, and is therefore not backward compatible to 3.6.1, and if so:
3) Can the two versions, 3.6.1 and 4.2p1, coexist on the same system.

best regards

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