MS Office 2007 has a new interface called "Ribbon" and a new file format. The new MS Office 2007 files will have an "x" at the end of the file extension (i.e. .docx, .xlsx, .pptx, etc...) and initially your Office applications will save to this new format by defaul. However anyone running one of the older versions of MS Office without a converter will not be able to open these files. It is possible to setup your Office applications to save to the older format by default. You will have to do this to each application that you use (Word, Excel, PowerPoint, etc...).
The new MS Office ribbon interface has a large round button in the upper left. This is roughly the same as the File option of the older MS Office interfaces.
Click this highlighted button to get to the options menu.
For this example we'll be using Excel, but the interface is the same for Word, PowerPoint, or any other MS Office 2007 application.
Click the highlighted options button to continue.
Click on the highlighted Save button to continue.
In this dropdown menu are a list of all the options available for setting as the default save format.
Select the Excel 97-2003 Workbook, Word 97-2003 Document, PowerPoint Presentation 97-2003, etc... to continue.
Once that is done you can click on the [ OK ] button to finish and use your MS Office applications as normal.
You will need to do these steps for each individual MS Office application.