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XPS Format
This is Microsoft’s new electronic paper frmat, an alternative to the PDF format. Office 2007 supports 'Save As' to both of these formats via Add-ins, download 'Save As PDF or XPS' here.
For more details on the XPS file format, see Jeff Bell's blog post:
Unlike the Office Open XML Formats, XPS does not attempt to capture the full structured richness of an Office document. As an electronic paper format, it is all about a high fidelity representation of the output only. Because of this, creation of an XPS document from Office is a one-way, export operation.
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PDF Format:
Invented by Adobe Systems and perfected over 17 years, Portable Document Format (PDF) is the global standard for capturing and reviewing rich information from almost any application on any computer system and sharing it with virtually anyone, anywhere. With the launch of Adobe® Acrobat® X software, PDF is more secure and dynamic than ever. That’s why individuals, businesses, and government agencies around the world trust and rely on PDF files to communicate their ideas and vision.
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