Microsoft Office Compatibility Pack
Microsoft Office introduced several new file formats which can't be read by older versions of the Office product. I'm not sure why Microsoft decided to change the file formats but it is really a hassle for a lot of users as it means having to make sure that you create documents in the right format so that other users can read them as well. I'm running Office 2007 on my system while my girlfriend is still running an older version of Microsoft Office.
It happened twice already that she worked on my computer and saved a Microsoft Word document in the new format (.docx) and was not able to read the file on her computer later on. She does not have Internet access there which means that it was really problematic to get the right format on her computer.
The Microsoft Office Compatibility Pack, which has a size of nearly 28 megabytes, is adding support for all new Office formats to computers that run previous versions of Microsoft Office. Just download and install the Compatibility Pack to make sure that you can read those file formats.
By installing the Compatibility Pack in addition to Microsoft Office 2000, Office XP, or Office 2003, you will be able to open, edit, and save files using the file formats in newer versions of Word, Excel, and PowerPoint . The Compatibility Pack can also be used in conjunction with the Microsoft Office Word Viewer 2003, Excel Viewer 2003, and PowerPoint Viewer 2003 to view files saved in these new formats. For more information about the Compatibility Pack, see 924074.
The compatibility pack can add support for docs, xlsx and pptx formats to the following Microsoft Office versions: Microsoft Office 2000, Office XP and Office 2003.
Microsoft is also making available an administrator template (adm) for system administrators.
This download contains an administrative template for the Word, Excel, and PowerPoint 2007 Open XML Format converters. These converters are contained within the Microsoft Office Compatibility Pack for Word, Excel, and PowerPoint 2007 File Formats and are also included in Microsoft Office Word, Excel, and PowerPoint 2007. Administrators can use this template to modify the default behavior of these converters.
Note that you need to make sure that all updates for the version of Office have been installed before you install the compatibility pack on the system.
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AFAIK they changed the format because the old one was more-or-less just a memory dump of the document and each version would contain a copy of each of the previous version’s formats (so version 4 would have 4 copies: v4, v3, v2, v1). The new version is XML based from what I’ve read, but as I use the OpenOffice.org suite (http://www.openoffice.org/) (rather than the Microsoft Office suite), I haven’t looked.