I believe that if I do not specify a default location to store the documents, Word will Save a document to c:\Users\username\documents and a copy in Skydrive. However the above wont happen if I specify "Local Computer" as default.

Even though I specify a local default drive and folder ex.:E:\My Documents. it wont save there automatically with a new document . It forces me to chose a Drive and folder. Thereafter it will always store the same document there ( after edit or view) . I guess that's how Word is supposed to work. Its just strange to me that Word allows one to specify a Default location and Folder for Save but does not do it automatically.