Hi jfklbj,
Since plain text contains no formatting information, it's both the most compact and most widely supported format. XML may be useful for producing formatted reports without recourse to your Excel wb.
Properly set up, you could save the relevant input data only in csv (text) format. This would require minimal storage space and your Excel wb could readily open and process the data for report generation. If you need permanent copies of the reports, you might consider storing them in PDF format. A PDF generally requires less storage space than Excel wb - largely because it doesn't have to store either the input data or the formulae used to turn that data into a report.
Finally, storage these days is quite cheap, so you might consider archiving the finalised Excel wbs onto CD/DVD media, or a removable HDD. You can compress the files beforehand to save even more space (though Office 2007 fiels are already stored in zip-compressed archives, so you won't gain much by compressing them again).
Cheers