Method 1: Update Office Mobile to v6.1 (WM5 & WM6 Only)
If you have a Windows Mobile 5 or Windows Mobile 6 PDA or Smartphone with a touchscreen interface, you can update the installed versions of Word, Excel and PowerPoint Mobile for native compatibility with the new Open XML file formats used by Office 2007. The updated version is referred to as Office Mobile v6.1. The update is not compatible with any non-touchscreen Windows Mobile smartphones.
In order to update your device, simply download the free Office Mobile v6.1 updater from Microsoft and apply it to your device. The updater is installed via ActiveSync (Windows XP) or Windows Mobile Device Center (Windows Vista).
DOWNLOAD OFFICE MOBILE v6.1 UPDATE FROM MICROSOFT
Method 2: Change the File Type When Saving
If you have a handheld running a version of the Windows Mobile OS which is not compatible with Office Mobile v6.1 (Windows Mobile 2003 SE or previous), or a non-touchscreen smartphone, an alternative method for Office 2007 file compatibility involves changing the file format.
Whenever you save an Office file for the first time in Word, Excel or PowerPoint, you're presented with the Save As screen, which asks you where you'd like the file saved, what name you'd like it saved under and so on:

While documents created in Office 2007 use the Open XML format by default, you can also choose to save in an older format for greater compatibility. The Save As screen gives you the option to customize the format used to save the file. This file format option is provided via a drop down menu labeled Save as type:

Word document files saved in the Word 97-2003 Document file format (highlighted above) are natively compatible with all current and recent versions of Word Mobile on a Windows Mobile device; the same is true for Excel and PowerPoint files saved as Excel 97-2003 Workbook and PowerPoint 97-2003 Presentation formats, respectively, for use with all versions of Excel Mobile and PowerPoint Mobile.
These 97-2003 older file formats are also convenient when sharing Office files to users who have not upgraded to Office 2007.
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