If you have a default images folder and you save the file to a location outside your root folder, the file is saved to that location and also copied to your default images folder.
If you do not have a default images folder and you save the file to a location outside your root folder, Dreamweaver saves it to that location and also asks if you want a copy of the file saved in your root folder. Typically you will choose to accept this option. If you cancel at this point, the file is not placed in the Dreamweaver page, but the web-ready image is saved to the external location you chose.
Dreamweaver defines the image according to the optimization settings and places a web-ready version of your image in your page. Information about the image, such as the filename and location of the original PSD file, is saved in a Design Note, regardless of whether you have enabled Design Notes for your site. The Design Note allows you to return to edit the original Photoshop source file from Dreamweaver.
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