XPS is a new document format. Office 2007 uses it, and your applications can use it too. Under the hood, an XPS document is just a zip file of many XML files and some binary resources (such as images.) The Microsoft XPS page says:

Microsoft has integrated XPS-based technologies into the 2007 Microsoft Office system and the Microsoft Windows Vista operating system, but XPS itself is platform independent, openly published, and available royalty-free. Microsoft is using XPS to bring additional document value to its customers, its partners, and the computing industry.

Since XPS documents describe layout and rendering as well as just content, you can think of them a lot like PDF files. As a result they're likely to show up on web sites or to be emailed to you. If you haven't yet moved up to Vista/Office 2007/IE7 you may not know what to do with them.

The solution is a free XPS viewer. It's up to you whether you want it integrated into IE6 -- I got the standalone viewer from the XPS Essentials. Took only a minute or so to download and install, and I didn't even have to reboot. Get it and be one of the cool kids again.

Kate