Photoshop CS3 error saving files - Could not save ... because the fileis already in use or was left

I have a problem with Adobe Photoshop CS3 that only started happening last night. Heres a description of the problem.
When I try and save a Photoshop file, I get the following error message:-
Could not save (filename). because the file is already in use or was left open
I have rebooted my computer, rebooted our server, un-installed & reinstalled Photoshop and also done a system restore, and I still have the problem. (The system restore actually caused huge problems I got the error message The licensing subsystem has failed catastrophically. You must reinstall or call customer support, except I wasnt able to reinstall or uninstall the product. The computer just would not run the installer. I had to undo the system restore.)
I can do Save For Web with no trouble and I can save files to the same location with every other Adobe product installed in the Web bundle, just not Photoshop.
We have 2 machines here with an identical set up (hardware and software) and the problem is only on one machine.
Even though Photoshop says it cant save the file, its actually saving the file in the following format:-
~psX.tmp where X is a random variable, either characters or numbers.
I have to manually open My Documents and rename the file to filename.psd so I can access it again.
Short of reformatting my computer (which Im not keen on doing because it will mean several wasted work hours and I will have to pay our IT people to come in and hook me back up to our network), how can this problem be fixed?
I have also Googled the problem and the only help I found was a suggestion to search for a psicon.dll file and rename it. This file does not appear anywhere on my system, so I'm at a loss.
I have contacted support about this issue, but thought it was also worth while to ask here at the same time.

I'm having similar problems with not being able to save files after editing them (and giving them a new file-name, obviously) in Photoshop Elements 4.0. I get an error message saying (for instance): "Could not save as (whatever I'm trying to name the file) because the file is already in use or was left open". Then I see a .tmp file (that I can't open)
I did a search and found that the file was being saved twice, once within Photoshop (where I'm working with it) and also in..
"C:\Documents and Settings\Owner\My Documents\My Pictures\Temporary"
I'm assuming this is the problem, but if you have any clue as to why is this happening and what I can do about it, I'd welcome any input. I've been using PSE-4.0 for years, and this problem just started cropping up. The only (cumbersome) way around this problem has been to just make my edits (in PSE-4.0) and do a "save" under the original file name, then go into explorer and rename the file. So, in short, I cannot do what I've been doing for years, editing a picture and saving it (renamed) in the sane folder (or a different one).
I can "see" the .tmp files in PSE-4.0, but they won't open.. but they will in JASC.. odd..
Thanks-
Bob

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