InDesign isn't recognizing an Excel .xls document as a data source for data merge??

Working on a data merge and I'm trying to select the .xls document that the customer provided. But InDesign (both CS3 and CS5.5) wont see it as a good file. When I turn off "Support Filetypes" in the data import window and try to force the program to use it, it says "The data source file you selected either has no records or is not a supported file format. Please fix the file, select a file that contains records, or select a supported file type"
It definitely has records. I opened it in Excel. I don't know why .xls isn't supported.
Should I try opening back up in Excel and saving as a different format such as tab delineated or whatever it's called?
Chris

You need to save a tab-delimited text file or a .csv file from the excel spreadsheet.

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