I dont think that games are upward compatible. a physics rewrite around 2.40 obviated many games, specifically the python. The logic bricks have not changed in like 8 years, but python has. So, you have to upgrade them to get them to work. Games packaged as EXE’s should still work though, although the Vista OS upgrade seems to break a lot of things.
The “not a blender file” error means one of two things:
There are spaces somewhere in the file path. For some reason, Blender sometimes does not recognize spaces in file paths. Check to make sure there are no spaces in any of the folder names and file names.
The file was compressed in an older version of Blender (this is specifically a problem with games made in Blender 2.25). Compression algorithms have apparently changed between some releases, so you cannot always open games made with older versions in the latest version of Blender. I personally have Blender 2.25, 2.41, 2.42a, and 2.43 on my computer. I have not found a file that will not open with one or more of those versions.Keep in mind that it is best to run a .blend in the version of Blender it was made in, since games are not always upward or downward compatible (like RogerWickes pointed out). You may get unexpected results if you run a .blend in other versions (especially related to physics).