Some of the features which are supported in the new format include,OneNote web App, Versions, Writing Mathematical Equations (Supports MathML), Linked Notes, Recycle Bin, and a lot more. See Daniel Escapa’s post on the list of new features in OneNote 2010.
So if you are having your OneNote files in old format, you may be able to still read and write in OneNote 2010 but you may not be able to enjoy the new features. You can convert them to new formats and incase if you want to share with someone who has a OneNote 2007, you can convert back also!
So how to change OneNote 2007 to 2010 format?
Go to the OneNote Backstage by clicking the Office Button on the top left corner.
Under Info, Click the Settings of the Notebook and Click on Properties. (You can also right click on the notebook and choose properties while you are in the main OneNote window)
Click Change to 2010 to convert the format. You can also convert back to 2007 format. As you can see converting to 2010 format enables page versions and if you prefer you may disable it.
Before converting to 2010 format, the onenote notebooks will be in compatibility mode and both the files still have the extension (.one)