Answer:
.wps is a Microsoft Works Word Processing extension
Works is a completely different product that Microsoft still produces (they now sell Microsoft office 2007 and Microsoft works 9. If you want to open a .wps file in office, simply right click the file then click open with. Select the program word from the list and it will open (not quite sure why office doesnt automatically open these files by default, pretty stupid if you asked me).
WPS files can sometimes be opened with a special converter when you have later editions of Word. Use the suggested link to get more information on this.