Hi Chris,
I think I understand what is going on here.
There are two different and distinct things we need to be aware of.
1) the file format. Gnumeric can create, read and write MS Excel compatible files with the .xls extension. eg myfile.xls
Gnumeric can also create files using its own file format, these have the .gnumeric extension eg myfile.gnumeric these are much more betterer for a bazillion reasons but you can't use it if you want excel to be able to open and read the files you're creating and modifying in gnumeric.
2) Windows has a thing called "File Associations" this is what windows uses to know what program to start when you open a file. e.g. if you open a file called myfile.txt it launches notepad and opens the file using notepad.
With Office installed it sets default file associations for .xls to excel and .doc to Word.
These file associations are only suggestions, they can be changed and overridden. Eg if the default spreadsheet is Excel such that double clicking an .xls file launches excel you can still launch the gnumeric program and open that same file with gnumeric regardless of the file association.
I think 2 is your issue. If you look up your windows documentation on how to set file associations you can change it and it should make no difference as to whether you can open the file with Excel.
You should test this by creating an .xls file with excel, then opening it with gnumeric, then create another spreadsheet with gnumeric (being sure to save it as an excel compatible file) and checking you can open that in excel.
This way you won't have any issues with sharing files with other people unfortunate enough to still be using the vastly inferior spreadsheet from microsoft.
