The issue is not Win 7 or XP, you have programs intalled on XP that you don't on Win 7. You probably need to install MS Office on your Win 7 computer or OpenOffice for a free solution. The reason your documents show up as WordPad is becuase it can open .doc files if Office is not installed, but only ones formatted pretty simply.
It's like bying a new car, driving home, and saying "Hey, I had my kids in the old car, where are they now?".