This just in from Information Week.
Office Goes XML
Microsoft's next version of application suite will save files in E-mail-friendly format.
By Aaron Ricadela, InformationWeek
June 6, 2005

Starting in late 2006 with the release of Office 12, Microsoft Office will no longer use the default save of .doc, .ppt, .xls. Word documents will default save as XML fiels. Users can still save their documents as .doc however they will need to choose the "save as" command to create the old formats of .doc, .ppt, and .xls.

"Microsoft plans to ship a free tool that lets owners of some previous Office versions read Office 12 files and one that reformats large batches of documents." (Huh, I am thinking that this free tool is going to be a royal pain.)