File Formats in Word 2007
Microsoft Word 2007 is capable of working with documents in three file formats. The native format uses the file extension ".docx". Files saved in this format can use the full range of features found in Word 2007, with the exception of macros. Any Word 2007 document which contains macros must be saved in a separate file format using the file extension ".docm".
In addition to its two native formats, Word 2007 is also capable of both opening and creating files using the old ".doc" file extension, the file extension which was used in previous versions of Word. However, Word 2007 documents which are saved with this file extension will not have access to the full range of features found with in Word 2007. Some new features, such as Themes, will not be available in any files saved with the ".doc" extension.
When you save a Word 2007 document for the first-time, these three options are available in a drop-down menu labelled "Save As Type". Unless you specify otherwise, the new file will be saved with the file extension ".docx". However, if you find yourself exchanging documents with a person using an older version of Word, you can save the document using the file extension ".doc", which is backward compatible.
what about the ".docm" format? Well, when you open a document containing a macro, by default, Word displays a security warning notifying you that macros have been disabled. If you want to, you can then click on Options and enable the content.
When you open a file created in an old version of Microsoft Word, Word 2007 does not automatically convert the file to the new format. For your convenience, it leaves it in the old format and goes into a special mode called "Compatibility Mode". (The words "Compatibility Mode" are displayed in brackets next to the document title.)
As long as the file remains in compatibility mode, you can still continue working on it, making changes to the document and saving those changes. However, certain new 2007 features, such as Themes, will not be available. If you place the mouse over the Themes group of the Page Layout Tab, you will see a tool tip saying: "This document has been opened in compatibility mode. To use this feature convert your document to a new file format. Click on the Office button and then click convert." If you do as the message invites you to, "Compatibility Mode" disappears from the title bar and when we save the file Word changes the file extension and the document will then have been converted to the Word 2007 format.
If you find yourself in an environment where both Word 2007 and older versions are in use, Microsoft has provided another solution. It is possible to install an update called the Office Compatibility Pack. This makes it possible for older versions of all the Microsoft Office packages to open the new file formats.