There were too many changes made in DKS to maintain saved game compatibility with D2:ED (redesigned flying fortresses, changes to enemy placement and loot, etc). You can start a new level 35 character at the beginning of the add-on content, though, if you are far enough with your current character that it would be easier to finish off D2:ED before starting DKS.
On the PC, D2:ED saves are compatible with FoV, and playing the game there is a seamless transition into the add-on. After finishing your current character, there is a patch to convert D2:ED+FoV into DKS.
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