After some searching Knowledge Base I found this article:
http://support.microsoft.com/kb/271513/en-us

titled: How to troubleshoot errors when you save Excel files. Just
what I was looking for!

Towards the bottom of this lengthy article is the following:
<quote
Restricted permissions
When you save an Excel file to a network drive, you must have the
following permissions to the folder where you are saving the file:
· Read permissions
· Write permissions
· Rename permissions
· Delete permissions
Note
</quote

So there you go. If you do not have these permissions, the Excel save
process cannot be completed.

Fantasic...

Thanks Microsoft for making such contracitory software. On one hand
they stress, promote and push data security down IS personnel's
throats, and on the other they force you to concede and compromise.

Please, someone tell me this is NOT THE CASE!!