In Mountain Lion, the default save location for TextEdit, iWork, Preview and other apps, is iCloud. You have to expand the save dialog and then choose where you want to save a file locally. In the GUI there is no way to change that. But now you can open the Terminal and run the following command to change the default location away from iCloud to your local Mac.
defaults write NSGlobalDomain NSDocumentSaveNewDocumentsToCloud -bool false
To change this back to the default, run this command:
defaults write NSGlobalDomain NSDocumentSaveNewDocumentsToCloud -bool true
Thank You Mac OS X Hints.
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