PS can save a flattened version of a file with the layered one. This is, amongst others, done to ensure maximum backwards compatibility, that is: with apps that can open PSD but without layers.
Of course, this takes valuable space on your HDD. But you can open a flattened version of a layered file by holding down SHIFT+ALT/OPT while opening the file. (works in 7, probably also in 6, but I can't verify as I uninstalled that one.)
Problem is, or might be, that in 6 this option had to be checked on in Preferences>File saving. In 7 this option is default on.
Should you want to turn it off to save place or simply because you don't need the option (you can always do it manually and make a simple action with self-chosen shortcut for it), you can do so under Preferences>File saving. You will see two checkmarks: one for layered Tiff files (I put this one off) and maximise backwards compatibility. You will be met with a guardian pop up window, warning you that this is impolite etc, but you can checkmark not to see this popup again. Yet every time you save a PSD, the warning is there. I do hope this is a bug that will be eliminated in 7.01 because it is very boring, and I like freedom of choice.
Still, with the HDD's of today, there is room enough. And if you want to save a layered PSD that has to be as small as possible, set your prefs and pass the pop up guardians with dignity, perseverance and determination.B7
