Opening .xls in 2010 Error: file is in a different file format than its extension indicate

Hello- I'm banging my head against the wall on this one. Searched this site, but can't find a solution.

When I try to open an .xls file in office 2010, I get the following error: 'file is in a different file format than its extension indicates'. It then opens in protected mode.

What is wrong. The file opens fine in 2003, but when I try to open in 2010, I get that error.

Any advice?

Thanks!

Setup: Office 2003 and 2010 - All versions are up to date and running in Win 7.