Saving files into subfolders with Leapard

In mail, i can only save to Downloads or a folder on the same level. It won't let me choose a subfolder or create a folder like i could before. Same thing when i try to save a file. When i'm using Adobe CS3 applications i swich to the adobe dialog boxes but this seems so stupid.

This is a HUGE time waster for me. I deal with a projects that involve a great quantity of files that need a lot of folder organization. Is this something to do with stacks? Am i being required to think differently? Help!

but i can't choose subfolders or create a new folder like i could before.

edited to add: Oh THAT button. The one next to the file name. THANK YOU! THANK YOU!