This is perplexing on a number of levels.
As further background, I recently (mid-Mar) upgraded from WinXP3 on Fat32 to Win 7 on ntfs, and (as MS described) this was a whole replacement action - keep the original disks of programs required handy for a reinstall. Which is what happened - after the upgrade I reinstalled VS11.5+ including the patches that applied. And worked for week or so with various project files. Then a good deal on X5 came along and I took it. The install went well and I worked with it in a batch of holiday project files for several days before encountering the issue reported.
After I read the responses above I did a bit of further testing. Double clicked a known really old, untouched by X5 even to look at, VS11 project file from within explorer, and it opened VS11 and then the project file: OK. Reversed that: opened VS11 and then opened that project file - again, opened OK.
I closed both VS versions, and tried opening the project file I encountered the issue with: from explorer (double click the file name), and VS11 opened and then it reported the file format not supported error. Closing VS11, opened X5 and then opened the same project file, and it works.
Complications found: from within explorer, opening the properties of project files old (VS11 only) and recently worked on (with X5), are both reported as type of file "Ulead VideoStudio 11.0 Document (.VSP)", and open with "Ulead VideoStudio". Both of the files affected were originally created with VS11, but one of them has been extensively changed using X5. I would have expected that the changed file last saved with X5, would open with X5 when double clicked in explorer. Nope. Opened the older/original VS version and then reported the file format issue.
And I think that's what occurred in the event that led me to report this occurrence, which late one evening after a bunch of work was puzzling to say the least. But it leads at least one interesting after effect - like why does X5 not update the vsp details (eg open with) even as it changes the file format on a current or an old file?
Many thanks for the various inputs