This policy setting controls whether users with the Microsoft Office Compatibility Pack for Word, Excel, and PowerPoint 2007 File Formats installed can open Office Open XML files saved with pre-release versions of Word 2007. Word Open XML files usually have the following extensions: .docx, .docm, .dotx, .dotm, .xml.
If you enable this policy setting, users of the Compatibility Pack will not be able to open Office Open XML files created in pre-release versions of Word 2007.
If you disable this policy setting, users with the Compatibility Pack installed can open files saved by some pre-release versions of Word, but not others, which can lead to inconsistent file opening functionality.
If you do not configure this policy setting, the behavior is the equivalent of setting the policy to Enabled.
Note - See "Plan block file format settings" (http://r.office.microsoft.com/r/rlidGroupPolicyBlockFileForm2?clid=en-us) in the 2007 Office Resource Kit for more information about using Group Policy to manage and enforce file format requirements. Also, see the "File Block Technology" section in Chapter 4 of the 2007 Microsoft Office Security Guide for information about the Microsoft Office Isolated Conversion Environment (MOICE), which provides another method.