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Default PopUp w/ Save as XML Encrypted in 2007

I have a "Data Workbook.xls" that uses a "Source Workbook.xla" to manipulate
data. In our office we run 2003 and 2007. When the user opens the data
workbook in 2007, makes changes, then saves, a message asks if I want to use
XML encryption to save it. I always click "No", because I am not sure if
2003 supports XML. Would it cause a problem if I clicked "Yes"? What
exactly is it asking to do? Can someone explain?
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Cheers,
Ryan
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