I look at 2.5 ways of compatibility ;-)
Often work related stuff makes it necessary to be able to read other MS docs. Currently (in hard cases) outsorced to one of a series of VM's at work, installed purely for such stuff and with a VM for each version IAC.
If formating is no issue, I read it locally with the new-doc-formats enhanced version of XP installed at a local VM, if my 97 fails. That is 1.5 ways - the other is people being able to read my stuff. Staying at 97 almost guarantees that others can read my stuff, even on phones using less then perfect Office clones - the 97 formats are probably still the ones supported best ;-)

As I have payed for 97,XP, (and a newer version via HW-bundle) my decision is mostly driven by lessening the pain overall. As I am NOT a power user of Office needing all functionality I am content with sometimes reformationg a page layout and touching some doc paragraph styles, even if I use Office between 30 - 60 min each day.
Speed of starting (esp for email att. from secure sources) is important when not connected to big screen and leaving Excel and Word open just in case.
I tried XP, saw no big benefits for me and stayed in 97. Tried the ribboned stuff, found it annoying and not worth re-learning, so added import helpers to XP. Tried OpenOffice after the ribboned debacle, did not like it either - so why try so hard to overcome my hard-won inertia with 97, if the only bad thing is need to install always again via CD, as I am licensed to do ? Will try Libre some time, but as it has nearly no cost benefit (possibly existing current re-sale worth discounted by personal laziness) doubtful if it will replace 97 - I see no arena where 97 completly fails.

Yes, sometimes I need the newer functions, but that is always connected with some billable effort - then I install and bill installing if really necessary. No need to add it ti the managment task of keeping my PC/program stack running on my CPU zoo. There is an Office suite from Textmaker being praised as best implementation on Android with a not too-expensive companion suite for Win and Linux - might try that one first, unless I jump onto one of the Haswell based 8' intel win tablets already sporting a new 2013 Office license from MS. And even that one would get 97 for keyboarded tasks, as the footprint of 97 is comparatively tiny.

>Of course, one reason that folks often stay with MS Office is for sake of compatibility. Compatibility -- what compatibility? Newer versions usually default to mode that creates formats unreadable in older versions. When you try to "downgrade" you often lose much of the formatting -- even if you happen to choose format (e.g. Word97) that has certain features but you lose some of the formatting anyway. In the cases where the formatting seems to come through OK -- the resulting document can't be edited without having "side effects" -- forcing you to go through the document and re-formatting everything so that it comes out OK. It's also annoying that often stylesheet formatting gets "in-lined" so now it's nearly impossible to maintain consistent formatting if you're switching between different versions of Office (one might "why is that ever a concern? Why even downgrade?" -- ever try collaborating with folks, and each person has different version?). And of course, there's the situation where certain "legacy" formats aren't supported anymore -- ever come across old Word documents that can't be opened by latest edition of Word? I have -- and it occurs with enough frequency to be annoying. So one might ask... why stick with MS Office?
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>Although compatibility with LibreOffice isn't 100%, I've noticed that it's not any worse than with MS Office.