xls is the pre 2007 excel format.
xlsm as paspug said is macro enabled excel format which is post 2007
The key differences are xls is purely binary format for its structure whereas xlsm & xlsx (and others) are a collection of XML files which have been zipped up
If you rename the actual extension to .zip you can unzip them to take a peak at how they're structured.
Same for docx, pptx, they went from propertiary binary encoding of the files to XML structure.