CS4: Save as Jpg saves as psd

When my wife tries to save a raw or psd file in Photoshop CS4 it can only be saved as a psd. Example: Clicks save as, chooses jpg, files name stays as a psd and saves as a psd, not as the chosen format. Read that again, she can choose jpg, tifff, etc., but the file name stays the same and still saves as a psd. I deleted the preferences file. Images are 8 bit, rgb, and flattened - I tested untouched raw images and they do the same thing. I can save both the psd and raw files as anything I want if I transfer them to my computer - So it must be something wrong in her Photoshop. I have changed file names, directories,etc. Even deleted the preference file again. I tried the control/shift/alt when opening Photoshop, but it only shows me the shortcut information. I am at the point of doing a complete uninstall and re-install. Any ideas?

I am on the phone with adobe tech support and they are having no luck.
Any file whether it is jpg, psd, tif, etc., can only be saved as the format it was opened in.
So, If I open a jpeg file, I can only save it as jpg. Psd can only be saved as a psd. Etc. Must be a windows update problem?
I have 2 computers that are doing this and one that isn't. The only difference that I can see is that the 2 that have the problem are on auto update for windows.
I tried restoring to before the problemand the problem continues.

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    Greetings. I very frequently save "jpg" (or "jpeg") version
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