<p>Is there a way to start another application from within Compact .Net framework 1.0 similar to </p>

<pre><code>System.Diagnostics.Process.Start
</code></pre>

<p>on the Windows side?</p>

<p>I need to start a CAB file for installation.</p>

Treat the share as if it were your source control system. Make the share read-only, which will force developers to get local copies in order to make changes. You then have a somewhat stable version to compare against. This would help facilitate being able to do "merges". "Checking" code in would have to consist of some sort of backup strategy for the file (possibly making a copy of the file with a timestamp and username as part of the new file name) and replacing the original with the new version.
That being said, doing this type of activity without a real source control system that is reliable is going to be difficult and error-prone.