I had a customer working on a proposal for an entire day, in Word. Late in
the afternoon, a storm came over and knocked out the power in the area for a
few minutes while he was working on it. He didn't have a UPS so his machine
just stopped working as you would expect seeing it is a desktop machine.
Anyway, he has been working on a Word97-2003 format .doc not the normal docx
Word 2007 uses by default. When the power came back, his machine was OK and
Word went into autosave and he tried to load that document only to get
constant errors. I had him email me the document and checked it out at a raw
data level and found it was actually a Word97-2003 document, which he hadn't
told me and renamed the autosaved docx file to a .doc file and it worked
perfectly.
So, the point is that this is a bug report. The autosave should actually
work in with the old format but apparently doesn't.