WEIRD Excel problem when saving....

OK,here's the deal.. I created a folder on one of our servers where I want some people to save files , but not be able to modify them. Save them , be able to open and read them, but that's it.
I created a test folder and gave myself Read/write access to it, not modify...

Ok, when I open a file in Excel and "Save as" from Excel , I get the message, "File already exist, do you want to replace it" , even though the folder is empty and this is the first time I'm saving this file.... If I click "NO" , don't replace it, it saves it , but when I check the file , it's 0 bytes , nothing in it...????

If I save from Word or any other application I don't have any problems. If I save to my desktop and "Copy,Paste" to the folder , it saves fine too. The problem is only when I try to save directly from Excel using "Save As".

Any ideas?? PLS???