Format Cells dialog is not displayed when file generated with XLS

[Malhar]

I'm working on a heavily data-centric project on 3.5 platform. One of the
modules in this application involves creating Excel file on the fly.

So these files, I take the raw data in XML, apply XSLT and generate
Office/XLS ML (XML) file.

After the XML file is generated, the the system programmatically invokes
Office Interop component, opens the XML file, and then invokes "Save As" API
for converting XML to XLS binary format.

--- All this is working just fine as in the data & the formatting is correct
---

Our users reported one issue/behavior that when opening the binary XLS file
generated using 2007 Interop, the "Format Cells" dialog is NOT launched --
there is also no warnings/errors from Excel. But if the binary file was
generated using 2003 Interop, the "Format Cells" dialog is displayed normally.


So here's the flow:

1) Raw XML ==> 2) XSLT ==> 3) Excel XML ==> 4) Interop Save-As ==> 5) XLS file

To further complexify this problem ..
Scenario 1: Open the Excel XML in Excel 2003 ---> Format Cell works

Scenario 2: Open the Excel XML in Excel 2007 ---> Format Cell works

Scenario 3: Open the Excel XLS (Generated in 2003 Interop) in Excel 2003
---> Format Cell works

Scenario 4: Open the Excel XLS (Generated in 2003 Interop) in Excel 2007
---> Format Cell works

Scenario 5: Open the Excel XLS (Generated in 2007 Interop) in Excel 2003
---> Format Cell **DOES NOT** work

Scenario 6: Open the Excel XLS (Generated in 2007 Interop) in Excel 2007
---> Format Cell **DOES NOT** work


I do not have any "lock" or protection applied to the XLS file that would
result into this. I'm not sure why the XML file in Office 2007 behaves
differently than the XLS file generated using the same origianl XML file.

Can someone please help? I did not find any articles sheding light into this
behavior.

Thanks.

- Malhar