Usually, Office programs give you the option when saving to save in the older format. This may require selecting the "Save As" option instead of just "Save", though. I also don't know for a fact that Office07 retains this feature.

There are a variety of reasons why it might be difficult for the professor to view the file, but if the response was as curt as you suggest, it sounds like he's being a dick, especially if he specifically asked for a PowerPoint doc. And also especially if you were able to open it with Office03 without problems. That either means he didn't try at all, he has an ancient version of PowerPoint, despite asking for files in that format, or he has a problem with his computer, none of which would be your sister-in-law's fault.

My suggestion would be to delete MSOffice and just use OpenOffice anyway. Or, even better, make a PDF of the slides. Unless either the professor or your sister-in-law are in love with PowerPoint timewasters transitions.
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Bitt Faulk