A family of Microsoft presentation graphics products that offer tools for creating presentations and adding graphic effects like multimedia objects and special effects with text.
They're not converted to another format. Notice you can still double-click them and open them in Equation Editor. The problem (which was totally the fault of PowerPoint, and has been corrected in PowerPoint 2010 as you noticed) is the animation. Try an equation on a slide without any animation at all on the slide -- no animated text, no animated objects at all. Then try one with animation. You'll see the equation on the slide with animation is "pixilated" and not as smooth-looking as the equation on the slide without animation. Couple of work-arounds to this. One, you can simulate animations by building multiple slides with successively more information on each one. Clearly this will simulate the look of animation only with "appear" animations, such as appear, dissolve, fade, etc. It will not work with "movement" animations, such as fly from right, zoom from center, etc.
The second work-around is to use MathType to save the equations as high-resolution GIFs, which are not pixilated the same way by the animation.
Bob Mathews
Design Science, Inc.
Twitter: @afwings, @MathType