Open in InDesign attempts to open the currently viewed file in the same version of InDesign the file was last saved in. If that version of InDesign cannot be located on your computer, then IDMarkz will use the System Default version of InDesign (usually the latest version of InDesign loaded on your system). Since this is usually an older version InDesign file being opened in a newer version of InDesign, IDMarkz will popup a warning letting you know doing this may break backward compatibility with the older InDesign if you Save the file.
If you try and open a newer InDesign file on a system that only contains older versions of InDesign, IDMarkz will first convert your newer InDesign file to an IDML file and then open that IDML file in the older version of InDesign.
In order for this to work, you must be using InDesign CS4 or later, as CS4 was the first version of InDesign that supported IDML.