Excel: 2000 and 2003
Server OS: Server 2003
Client OS: Windows XP

A user tries to save a new file made in excel to a folder on the
network. Users have have Read and Write permissions but NOT Modify.
They are given this message in the Save As dialogue box:

The file name <File already exists. Do you want to replace the
existing file?

At this point the user can see the file has been created in the folder,
however it has a 0Kb file size.

If the user says 'Yes' to the above question they are given this
message:

Cannot save <Path\File.xls The folder is marked as 'Read Only'.

The 0Kb file is left and cannot be modified. When you open it, its
contents are blank.

This happens with all file types made in Excel. I've tried saving as
txt, html etc. If I save a txt file from notepad, or a html file from a
web editor I get this message:

<Path\File.file already exists. Do you want to replace it?

Clicking Yes allows the file to save.

Word files save fine with no messages.

Has anyone got any idea why Excel explicitly denies me to save files to
this folder, yet Word files save with no trouble?