How is this different from the binary (.doc, .xls, and .ppt) file formats?
The new defaults are different because they will be based on XML. As a result, you'll be able to open and automatically edit Microsoft Office Word, Microsoft Office Excel, and Microsoft Office PowerPoint files with any XML processing program without having to "Save As" XML. The new formats build on Microsoft's earlier commitment to XML by improving file and data management, reducing file sizes, and improving recovery of damaged files. It will be easier than ever for users to access data from their Word, Excel, and PowerPoint files and integrate that information with back-end systems and processes.