Your use of the Pictures library to store PowerPoint and Excel files is certainly not standard. In any event, your files won't be saved there, but in either the 'Public Pictures' or 'My Pictures' folder within that library. Ordinarily, they'd default to the 'My Documents' folder, within the Documents library. Even so, I can see no reason why deleting an item from the Pictures library would delete it from the Desktop - which is an entirely different folder. Are you actually saving two copies of each file? If not, they're not being saved to both folders.

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Cheers,
Paul Edstein
[Fmr MS MVP - Word]