Reply to thread

To camarosource:

Yes to all three.

After you place a file as a Smart Object the original file and Smart Object's content don't relate in any way any more.

To Steve:

When you click on the Smart Object layer you're brought to Place.psb - a copy of Place.psd in Main.PSD, not the original Place.psd.

Every time you make a change to Smart Object and hit save you update the Place.psb - again a copy of Place.psd in Main.PSD, not the original Place.psd.

Smart Objects are just files in a file. When you edit Smart Object PS extracts it's file to a temporary directory(as a psb file) and starts the proper application to edit it. When the application finishes editing, PS updates it's inside Smart Objects's content copy and redraws all it's views in the file. Temporary file may be deleted now, but luckily PS don't do it for efficiency reasons