Saving Modified Photos Using Elements Version 11

I recently upgradedfrom "Elements 2" to Version 11.  I previously saved all my edited work in JPEG format and to the "My Pictures" folder.  I was then able to open all modified photos and share them with another computer without resorting to any specialised program.  I wish to continue to do the same using Version 11.  Having made several attempts without success to save modified photos using my well tried and successful method and having read the Manual to see why the process is not successful with Version 11 I am now exteremely frustrated.  Each attempt to save a modified photo results in a Thumbnail icon being loaded into the "My Pictures" folder with the elements 11 logo.  I then are only able to open the photo (which incidently does not carry the modified file name from the original) by way of the elements 11 program.  What am I missing/doing wrong?

Dear swharton07, 
Thank you for these thoughts.
When you say:
"Do you have your preferences set to save the files in My Pictures?", did you mean going to the "Edit" heading in Elements 11 workspace and then selecting "Preferences" then "Saving Files" and then "File Saving Options". I have done that and on the three Dialogue Boxes have the following active:
  a.. "On First Save" - Ask if Original
  b.. "Image Previews" - Always save
  c.. Have also ticked "Save as to Original Folder"
I have not been able to find a Preference selection that allows me to specifically set "save the files in My Pictures".
By way of additional background here are the details of what I have been doing with a failure on every occasion.
  a.. My O/S is "Windows XP Home"
  b.. I open Elements 11 program
  c.. Import a photo direct from My Photos" with File Name IMG_1234
  d.. Modify the photo
  e.. Select File then "Save As"
  f.. In dialogue box select save position in a sub folder of My Pictures and rename modified photo IMG_1234.1
  g.. Select format as  "JPEG"
  h.. Tick box "Include in Elements Organiser
  i.. Quality "High"
  j.. Format option selected as "Baseline (Standard)"
  k.. Save
  l.. Close modified photo in Elements 11
  m.. Go to My Pictures and the desired sub-folder
  n.. All I can see is an Icon with no photo depiction and icon has same file number as original photo (that is not the modified file number)
  o.. Try to open photo using Adobe Photoshop Album Starter Edition 3 Get message "Items listed were not imported -File is damaged or an unsupported format and then there is a further message showing C/: etc and last past of that message is showing the modified file number.
I am at my wits end as to what the problem might be and becoming increasingly frustrated to the point of wondering why I should be bothering  with as well having paid  for Elements 11 in the first place.

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