I ran into this problem 2 weeks ago, I would try to save pictures with a .jpeg extension and WindowsXP would only allow me to save them as Bitmap .bmp extension files. I used the following simple fix and it will fix the problem for me for only about 10 minutes, and then it goes back to saving thing as BITMAP again
So, what I was forced to do is to stop using InternetExplorer and I have to use FireFox as my browser now. Although, the following fix will correct the problem - how long it will remain fixed though is unknown.