When you create a document library, if you accept all the defaults at the time of creation, you will be stuck with a template.doc format. This means that whenever a user clicks on the "New" button to create a document in the library, they will get a Word 2003 template. This is fine if most of your audience for your library is still on Windows 2003. However, if most of your organization is using Windows 2007, you may want the .docx format to be the default.
If that is the case, you can do this very easily by going to Settings à Document Library Settings à Advanced Settings. There will be a section for Document Template. At the end of the URL in that section’s text box (it will look something like “YourDocumentLibrary/Forms/template.doc”), just type an “x” at the end of template.doc. Click Save and navigate back to your library. You will notice the Icon has changed from the old version of Word to the new one.
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