Thank you Chris for your input, although it doesn't help much. Command+S has always been plain save command and it shouldn't ask you anything, just save the current session. There is "Save as" command right under the save command in the file menu and that's obviously different.
I've been working on many HD, LE rigs for years and have never encountered this behavior, you shold just hit save and move on.
Anyway. don't know if it helps, but here's the screen shot of the window
http://dl.dropbox.com/u/8676181/Screenshot.jpg
The other suggestion - incremental save - saved my ass many times over the years. Good one!
Thank you again Chris.
lumcas