The upgrade document with QAS 4.0.x mentions running in Version 3 Compatibility Mode to support clients running version 3.5 and below (see page 54 of the upgrade guide).
This feature did not exist in 4.0.1. Is it something I need to set to work with existing 3.x clients?
Version 3 Compatibility Mode is a new feature beginning in version 4.0.2. It is not necessary to be running in compatibility mode to work with your 3.x clients and it is not necessary to be running in compatibility mode to add new 3.x clients.
The idea behind compatibility mode is that QAS 4.0.x can run in Windows the same way that 3.x did without any of the additional setup/features that come with version 4.0.x, including QAC (QAS Application Configuration).