What Did That Error Message Mean?
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Is It really A Problem If This file was created by a newer version of Microsoft Word?
The short answer, and the answer you most probably want to hear is "No, the fact that this file was created by a newer version of Microsoft Word is no problem whatsoever for software of this calibre". All you have to do is download what is called a Compatibility Pack. The error message itself gives you the opportunity to download this add-on, and you can also download the compatibility pack here.
This error message is simply caused by using a prior release of Microsoft Word 2007 to open a 2007 document. All is not lost, however, as the compatibility pack will provide the functionality that is missing from your archaic version of Word. Applications in the 2007 Office suite use the Open XML file format which is gobbledy gook to earlier versions. Vorsprung durch gobledy gook, as they say in certain quarters.