Whats the difference between the blue squares and the blue "W's" in Google Drive? They both are Text based documents that can be viewed using Google drive. The only difference between the two is the blue "W" or Word documents are not editable using Google docs. By converting the document you will be able to edit its contents using Googles word processing application (i.e. Google Docs/Google Drive).
To do this open the document and under File click Open with... > Google Docs and Google will automatically create a duplicate file in your Drive that is editable.