Chip, it may be PPC vs Intel related but more likely is that Apple do not place a lot of importance on forwards compatibility beyond a few versions of FCP. If you can find someone with an old version perhaps around FCP5 or 5.1 and get them to open and save in FCP format as well as XML then you might stand a chance of getting these into FCP7.
I had 5.1 & 6 on an old G5 but they are no longer available as my stepson just used the old case to rebuild as a Hackintosh for fun.
It must be something else. Just for funsies I just opened a file in FCP 7. The last save date of that FCP project was August 5, 2003. Over 9 years ago. Opened and converted just fine. I know at the time I was using a Mirrored Drive Doors Dual 1Ghz Power Mac G4. Must've been FCP 3 or 4.
There should be no reason it doesn't open. Perhaps add a .fcp extension. They didn't use the extension back then, but my test file opened just fine. But your data resource fork might be corrupt. ( as if I had a clue what a data resource fork is)