In regards to Office 2007 and PowerPoint

If you make a presentation in Office 2007 save it as a PPT then open it in
an earlier version of PowerPoint there is a chance you will loose some of
your formatting, backgrounds, and fonts etc.

My question is if the presentation is saved as a .PPS versus a PPT will
they
still encounter the same issues or does making it a PPS embed everything
into
the presentation.

PPT and PPS in older PowerPoint versions including 2003 is the same file,
only the file extension is changed. In PowerPoint 2007 PPTX and PPSX are
still the same file, but in addition to the file extension the file type is
saved in the document, too.

But there's no influence on quality and editability. You will lose quality
and editability if you save a file created in 2007 to PPT or PPS, because
the older versions do not have some of the newer features.

Best regards,
Ute