Windward Reports never used Custom XML (or bookmarks) for tagging. (We looked at both but each approach has issues that make them problematic at times.) But we do use tagging in Word, Excel, & PowerPoint as our report designer. We do have a very powerful Office AddIn to support this tagging. So I think I have as good an understanding of the issues around this as one can have and yet still be a disinterested party.
I'm not going to give an opinion on the case except to say I wish they could have reached an agreement. The big losers on this are everyone who made use of Custom XML for tagging as this is now removed. (And to say a pox on all software patents.)
First for the programmers who have to adjust, there is a product from i4i that hacks around this called . However, I don't think that is your best solution (explained below). My suggestion is to switch to using content controls, fields, bitmaps, and/or plain old text. The first three of these approaches are more robust than custom XML and are still supported by Word. We use all four approaches (user selected) and they are rock solid.
So what do you do if you have custom XML in your Word documents? If you don't use the custom XML, then there's no problem, just open the files and Word will strip it out, leaving you the rest of the document. Same if your use can be switched to using another feature. You will lose your existing markers but otherwise can continue.
If you need to find any files that have custom XML in them, this program for Microsoft will do the job (DOCX/DOCM only). Also, this restriction only comes in to play for Word 2007 sold on or after 11 January this year – and all copies of Word 2010. Microsoft has a good summation here.
If you must have the custom XML, your only option at present is x4w. However, I strongly recommend that you only use this as a stop-gap measure as you find an alternative to custom XML. Because you could find that the next service pack of Word will render x4w unable to save your custom XML. As there is no love lost between Microsoft and i4i, I would not be surprised to see in the next service pack:
For those that have to get programs converted to a different tagging system, I know this change sucks. But when you complete the switch to content controls, fields, and/or bitmaps, you will be a lot happier as you will have a much more robust approach. To see how well this works, you can take a look at our report designer AutoTag (it provides the capability to design reports, documents, & dashboards in Word, Excel, & PowerPoint).