Word 2010 documents use the .docx file extension. Word 2010 is based on Office Open XML formats (but you do not need to know how to use XML to work in Word 2010).
The reasoning behind this change is because XML helps keep documents safer by separating out files containing macros or scripts, keeps document sizes smaller, and helps to prevent data corruption and loss by making documents less susceptible to damage.
You can open documents that were created in previous versions of Word. When you open such a document, it will open in Compatibility Mode.
When you save a file that was created originally in a preview version of Word, the Save As dialog box will open automatically, to save the file with a .doc file extension.
Also, when you save a Word 2010 file as a previous version, Compatibility Checker will identify any new features that will not work in that version.