Lightroom is non-destructive. It doesn't actually save the changes to a file, it stores the data of the changes so that each time you open Lightroom up it can load those changes. If you want to "save" your images you have to export the image. This creates a copy of the image with your changes.
To export, go file>export or shift+cmd+E. In the dialogue you see all kinds of choices (file type, compression, colour space, naming scheme, etc.). I generally use an 8 bit TIFF (PS7 doesn't support 16 bit) with no compression and an embedded colour space of sRGB (this I am debating, but it works)
I think the Save function is there because it shows up in every app, however I doubt that it will ever actually be utilised.