You're not doing anything wrong! The data structures changed between version 8 and 8.5, so you won't be able to restore a backup from 8 into 8.5 and vice versa. If you need to look at some old data on a backup, it's best to keep an installation of 8 hanging around for that purpose. You can have mulitple copies of PowerChurch installed without problem, as long as they exist in their own directories.
If you're upgrading to 8.5, there's an upgrade routine that will make a copy of your old data, and convert it to the new format. If you've gotten far enough into PowerChurch to do a restore, you've passed that point. You'll need to uninstall 8.5, delete the pcplus85 directory, and then reinstall to access the upgrade procedure. It only occurs once when PowerChurch is first run after install.
Hopefully, this helps. If you need more detail, please give us a call.