You can use this tutorial with Adobe® Photoshop® Elements versions 7 and 8.
Learn why it's important to save early and save often. In this video, photographer Jan Kabili shows you how to save your files in Adobe® Photoshop® Elements.
To complete this tutorial, install the following software:
After you change a photo in the Editor workspace, you have the option of saving your changes to the original file. Or, you can save a copy along with the original.
To create a version set:
Note: The File menu includes both the Save and Save As options. If you haven't saved this file before, the Save option is not available. The next time you save this file, it will be available.
The name in the File Name field is different from the original file, as shown in Figure 1. It includes “edited1” after the original filename. The name changes because Save In Version Set With Original is selected. This option keeps you from inadvertently saving over your original file. As long as this box is selected, Photoshop Elements saves a copy of the file with a different name so that the original isn't saved over.

Figure 1: Options in the Save As dialog box
Make sure that Include In The Organizer is selected. Photoshop Elements saves a new copy of the photo along with the original and catalog the photos in the Organizer.
Note: There is no reason to save this file as a copy because you are already saving another version with a new name in the version set.
Notice the options in the Color section of the dialog box. You have a choice of whether to include the ICC Profile. The ICC Profile is part of the color management system. It is designed to help make the image that you see on your screen match the colors in the image that you output. Color management is covered in a separate tutorial.
Leave the ICC Profile checkbox selected if you are preparing the file for print. If preparing a file for the web, the ICC Profile isn't necessary.
Notice the options in the Format field. If the original photo was a JPEG, the copy for the version set is also a JPEG. JPEG is a typical format for digital photo capture. JPEG is a lossy file format. When you save as JPEG, the file is compressed and data in the file is thrown away to make the file smaller. So, if Save In Version Set With Original is not selected, be careful about saving as JPEG. Each time you do so, you throw away a little more file information. But, as long as Save In Version Set With Original is selected, this is the first copy of this JPEG called edited-1, so it's fine.
Notice, there are lots of other formats. Photoshop is the native file format and you can save a master copy of an image as a Photoshop document. Save in Photoshop format if you have used special effects because doing so preserves all the special effects, layers, and other features available in Photoshop Elements.
The PNG format is often used for saving files that are graphic type files for the web. So, if you make something like a button or a logo for a website, you can save it as PNG. TIFF is often used in the professional print world. So, if you are making something that will be printed at a professional printer, such as a brochure, you can save the photo as a TIFF.

Figure 2: JPEG Options dialog box
You can set the quality of the file. The higher the quality, the better the file looks but also the larger it is.
Note:You can close the image by clicking the X on its title bar or by choosing File > Close.
In the Organizer, you know there is a Version Set because of the Version Set icon on the thumbnail. That is, the gray box around the image, and the arrow to the right of the thumbnail, as shown in Figure 3.

Figure 3: Version Set shown in the Organizer workspace
The Version Set expands and you can see both of the images, as shown in Figure 4. The original is on the right and the edited version is on the left.

Figure 4: Version set expanded to show both versions
When you save in a Version Set, all the saved copies of an edited file are saved together on top of one another in your Version Set.
Selecting Expand Items In Version Set does exactly what you just did by clicking the arrow on the right side of the gray box. Selecting Convert Version Set To Individual Items takes both files out of the Version Set and puts them in the Organizer as regular files. There isn't a Version Set any longer. Be careful not to select Revert To Original. Doing so deletes the edited version of the file and keeps the original version in the Organizer. Another command to be cautious of is Flatten Version Set. This command deletes all but the top image showing in the Version Set. You can set which image appears on top by clicking Set As Top Item.
Remember to save your images often and take advantage of the built-in Version Set feature to keep your original photos safe.
If you enjoyed this tutorial, check out this other tutorial to help get you started using Photoshop Elements.
Jan Kabili is senior trainer and evangelist at lynda.com. She has authored numerous books on Adobe software, including How to Wow: Photoshop CS2 for the Web, Photoshop CS Complete Course, Photoshop Elements Complete Course, and Photoshop ImageReady Hands on Training for the Web (with Lynda Weinman). In addition to her lynda.com training videos which include Photoshop Elements 3 Essential Training, and Photoshop CS3 for the Web Essential Training, she has written many articles for leading software publications such as Macworld, Photoshop User, and Mac Design magazines. Jan has not only contributed to the Adobe Classroom, but she is a published photographer and digital artist, with a Master of Fine Arts degree from University of Colorado at Boulder, and a law degree from Stanford Law School.
In Photoshop Elements 7 for Windows Essential Training, Jan Kabili shares workflow techniques for organizing, editing, creating projects, and sharing. She also demonstrates how to enhance photos with this budget-friendly software. Jan explains the latest updates to the Organizer and Editor workspaces, and also covers new features like the Smart Brush tool and Photoshop.com integration. Elements is very well known for its project features, and Jan shows how to create books, collages, panoramas, and more. Example files accompany the course.