Microsoft Office 2007 has new Open XML file formats set as the defaults in Word, Excel, and PowerPoint. You can read Microsoft’s overview of the new formats here.
This is causing a bit of a problem for people who don’t have Office 2007 and receive documents from correspondents who do have the newest edition of Microsoft’s productivity suite, as older versions of Office can’t open documents with the new file extensions. The new formats are distinguishable from the old formats by the addition of the letter x to the file extension. The three most common extensions, for Word, Excel and Powerpoint, respectively, appear as .docx, .xlsx and .pptx, respectively.
By installing Microsoft’s Compatibility Pack, Office XP and 2003 users will be able to open, edit and save to the new Open XML format. You can download the Compatibility Pack from Microsoft.com if you need to install the converter.