Unablet o save the document to sharepoint document library.

Unablet o save the document to sharepoint document library.:

Environment: Win 2008 R2 x64, Sharepoint 2010

Document library is setup to have templates.

ISSUE: When I fill the template by selecting file/new and while save its saving this to the FILE SYSTEM rather than to the associated SharePoint Library :( moreover when I enter the url of my site collection under the file name its giving me error as "PATH DOES NOT EXISTS"

FYI:

WebClient service is turned On

Desktop Experience feature is enabled on the server.

Added the DWORD entry to registered as described in the KB article (even though its not a solution for sharepoint case) http://support.microsoft.com/kb/870853

Any help greatly appreciated.

Regards,

Vijay Gande