Has worked fine for me, i have XP Home with SP2...
I have read of people having issues if they dont have SP2 installed, so make sure SP2 is installed and upto date...
They are going to release a patch so that 2003 can read 2007 files in the 2007 format. This is limited to features found in 2003, if 2007 files is saved, and 2007 features used, 2003 will open only features found in 2003, if that makes sense? Didnt explain it well, sorry...