The Documents section of the System 7.5.x General Controls control panel sets which folder will be offered as the default location to be saved to when you save a document. There are three options to choose from:
1) The choice "Folder which contains the application" saves your document in the same folder which the application resides.
2) "Last folder used in the application" refers to the last folder to which the current application saved a document. Information for each application you use is stored in the General Controls Prefs file in the Preferences Folder of your System Folder. If this file is corrupted, the computer may revert to the last folder saved to by some other application. You can resolve this by dragging the General Controls Prefs file to the trash but you will loose the preferred folder settings for all your applications. This file will be recreated and updated as you save files in your applications again.
3) The last choice, "Documents folder" saves all documents to a folder called "Documents" that is created on your desktop. You can move the Documents folder and the General Controls control panel will locate it. If there is no Documents folder when you save a document, one is created on your desktop.
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