There are occasional reports of oddities when converting legacy docs to CS5. Export from the original version to .inx and open that in CS5, save as a new file with a new name (don't overwrite the old files -- there's no way for you to go back) and build a new Book in CS5.
As far as the indents, the correct way to handle this would be to make edit the body paragraph style to lose the tab and use a first line indent (you can use the GREP expression ^\t to find leading tabs and replace with nothing in the GREP Find/Change iin CS5), then make a second style for the first paragraph based onthe body style, but without the fisrt line indent, then sect the next style for that to the body style.
Ah, I see. Unfortunately, I have already saved over the file, having at first not realized thet tabs issue until it was too late. If I start over, is it possible to copy text, or even boxes, from the "broken" file to a new file? Or will this copy over the messed up data? Is there any other way to update the file properly?
Also, I have other files I need to edit soon. I no longer have access to CS2...is there any other way to convert these to .inx first?
Copying damaged data is probably not going to help. Try exporting all the individual documents to .idml, then open those and save with new names (don't overwrite again) and build a new book. You might get lucky.
If that doesn't work, try exporting a file to either RTF or ID Tagged Text (put the text cursor in a story someplace WITHOUT making a slection and the text export options will show up in the dialog to export wahtever story has the cursor in it). Place that into a new file and see if it works.