That's the new Word document format. You must use File/Save As to save in
older Word formats, or your fellow Word users need to install the Office
2007 format converters for their older Office versions.
That is the new format for Office 2007, you can change the default format if
you wish.
There is a round button in the top left hand coner of the Word screen, click
on it and then select "Word Options" at the bottom of the window, select
"Save", in the drop down pane labled "Savefiles in this format" select
"Word97-2003 Document (*.doc)", this will change the default format to .doc.
You can also do the same thing for Excell and powerpoint etc.