What I expected to happen was my Beta 1.8 instance to save where I told it to, in a designated folder.

What actually happened was it saved in the default ".minecraft" directory.

Steps to Reproduce:
1. Create an instance/profile
2. While creating the instance, change the directory to a designated folder
3. Save instance and open it. If you have any saves in your default .minecraft directory, they should show up in SSP.