In addition to some great new features, Microsoft introduced XML based file formats for Word, Excel and Powerpoint 2007. However, the new formats can be the newest annoyance till the time Office 2007 is not deployed and adopted in enterprise and home users. Microsoft Office 2007 saves all the files in the XML formats by default (.docx, .xlsx, pptx extension) which are not readable by the previous versions of Office.

To ensure compatibility with older versions, you have to save the files in 97-2003 format. Trying to remember to do that everytime you create and save a document can be irritating, especially if you create a lot of documents, spreadsheets or presentations.

To avoid remembering to save the document in 97-2003 format, you can setup office so that it saves all new files in the 97-2003 format by default. However, this is not a global setting and this must be done for each of the three office applications, i.e. Word, Excel and Powerpoint.

To change the setting, click on the Office icon in the left hand top corner and click on <Application> Options (Where Application is either Word, Excel or Powerpoint). In the resulting window that is shown above, click on Save to customise the settings and in the Preserve the backup information for your documents section select Word 97-2003 Document (*.doc) from the drop down list next to Save Files in this format: option.

Once you set this option for all office applications, Office will start saving the files you create henceforth in what it calls as Compatibility Mode.