By default, Office 2007 saves files in the new XML format (.docx, .xlsx,. pptx, etc.).
But these new formats cannot be immediately opened by someone running an earlier version of Office. Microsoft does provide an Office 2007 Compatibility Pack which will allow users of Office XP or Office 2003 (but not Office 2000 or earlier) to open, edit and save documents in the new 2007 XML formats
Of course, someone who is using the new Office 2007 apps can also select ‘File Save As’ option and save an individual document in an earlier format (97-2003).
But, if you are in the midst of converting, training and testing users with the new Office 2007 package, you may be wondering if there’s a way to force the Office 2007 apps to default to the older file format when saving files. And the answer is: Yes — using Group Policy
You will first need to download the Microsoft Office 2007 Administrative Templates
Then follow these instructions to using Group Policy to set defaulty file save options: Technet Office 2007 Group Policy