PS Elements can't be correctly saved to iPhoto

Question

Help! I had and still do have problems saving edits made in Photoshop Elements 9 to iPhoto. (I opened PSE in iPhoto, made edits and saved them. The edits, however, did not show up in iPhoto. I have a question in the support communities on this.)
I contacted Apple support, where I was given some horrible, bad advice, resulting in even more problems. Here is the newest, even more serious problem:
Photos edited in PSE no longer are saved in the iPhoto library. For example, if I open a photo in iPhoto, then open PSE from the edit button in iPhoto, and then try to save the edited photo, the default save locations goes to the Pictures folder. It does not go to any of the folders in the iPhoto library.  I think this is because the Apple tech had me rooting around my photo files, and this is the last place we looked for whatever we were looking for.
I need to get PSE to put the photo back where it needs to go.PSE now wants to dump all photos willy-nilly into the Pictures folder.  As it stands, I cannot edit photos in PSE and expect them to find their way back to iPhoto. Once this problem is solved, the other problem with getting changes to show up will be addressed.
A second Apple tech support person is looking into this issue, but any help from the good folks in this group would be greatly appreciated.
(Reposted from iPhoto for IOS)

Answer 1

Be sure you're following this workflow;
Using Photoshop (or Photoshop Elements) as Your Editor of Choice in iPhoto.
1 - select Photoshop as your editor of choice in iPhoto's General Preference Section's under the "Edit photo:" menu.
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2 - double click on the thumbnail in iPhoto to open it in Photoshop.  When you're finished editing click on the Save button. If you immediately get the JPEG Options window make your selection (Baseline standard seems to be the most compatible jpeg format) and click on the OK button. Your done.  3 - however, if you get the navigation window
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that indicates that  PS wants to save it as a PS formatted file.  You'll need to either select JPEG from the menu and save (top image) or click on the desktop in the Navigation window (bottom image) and save it to the desktop for importing as a new photo.
This method will let iPhoto know that the photo has been editied and will update the thumbnail file to reflect the edit..
NOTE: With Photoshop Elements 9 or 10 the Saving File preferences should be configured as shown:
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I also suggest the Maximize PSD File Compatabilty be set to Always.  In PSE’s General preference pane set the Color Picker to Apple as shown:
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NOTE: If you want to use both iPhoto's editing mode and PS without having to go back and forth to the Preference pane, once you've selected PS as your editor of choice, reset the Preferences back to "Open in main window".  That will let you either edit in iPhoto (click on the Edit button) or in PS (Control-click on the thumbnail and select "Edit in external editor" in the Contextual menu).  This way you get the best of both worlds.
OT