When publishing to Word 2007 the type of document that is created is based on the template that has been used. For example, a .docx file is created when a .dotx template is used, a .docm file is created when a .dotm template is used, and a .doc file is created when a .dot template is used.
For successful publishing, you need to Personalize your copy of Microsoft Office
For Word 2007 publishing, you need to manually type in personal details for the Microsoft Office Installation, in Word Options > Popular > Personalize Your Copy of Microsoft Office.
Without these details, Word 2007 publishing fails, with an error message "Document cannot be opened by Word: Line 1080 error, Bad parameter".