CNET'S QUICK GUIDE: Reading the new Office 2007 files

For the first time in a decade, Microsoft will introduce new file types for its Office software. Here's what you need to know to use the new files in older Office versions and how older Office files will work in the new Office 2007.

Microsoft has rebuilt its host of Office applications from the ground up. Along with the bold interface changes and new features, revamped file formats will affect how you work in Word, Excel, and PowerPoint, regardless of whether you plan to upgrade to Office 2007 from an earlier version.

That's because you'll need to take extra steps to share Microsoft's word processing, spreadsheet, and presentation files with people still running older Office applications. When you hit Save within Word, Excel, and PowerPoint 2007, your work will be saved in the new file format by default.

If you're using the 2000 through 2003 versions of Office, you'll be able to open the new Office files after you follow Microsoft's prompts to install compatibility updates. You'll also be able to open older Office files within the new Office 2007 applications, although some of the new features won't work until you save the older file in the most recent format.

The 2007 file formats for Microsoft Office software are Open XML-based, so they compress more information into fewer kilobytes and thus require less hard drive space than their predecessors. An added X marks the extensions of these new files; for instance, the DOC extension from Microsoft Word will be DOCX in Word 2007, Excel's XLS becomes XLSX, and so on. Other Office 2007 file extensions include DOCM, for Word documents that enable macros. The Open XML format, also known as OOXML, will be open source. However, Office 2007 software will not let you save work in either the Open Document Format used by OpenOffice or in the formats from Corel WordPerfect.

If you plan to share Office 2007 files with people who use older versions of Microsoft Office or rival Office software, here's what you should know (you can view our video to walk through these steps):