Unable to save a new Project to Project Server

Scenario:
You are connected to Project Server using Project Professional 2007 but when you are trying to save a new project you are not getting the Project Sever Save Project Wizard but get Save to File System Wizard.

Reasons:
1. You dont have proper rights to add a new project
2. You might have Office 2007 installed in "Combatibility Mode".

Resolution:
1. Open Project Professional 2007
2. Go to Tools-> Options.
3. Check the Save TAB
4. Make sure "Save Microsoft Office Project Files as: " should be Project (.mpp).
5. Now when you will click Save As.. you will get pops up to save to Project Server.