My colleague uses CS6 and I use CS5 so when working on a document together he is able to save in an IDML format. However when either of us then subsequently open this document it opens as Untitled and we then have to re-save the document. This leads to lots of versions of the same document which isnt very useful - is there any way that we can avoid this?
No - it's treated as a brand new file, hence the Untitled.
You need to save it to continue.
Ideally - both of you should be using the same version of InDesign to avoid any compatibility problems.
The ONLY way to avoid this is for you to upgrade to CS6.