This issue comes up quite frequently, users who have Office installed on Windows Server 2008 / 2008 R2 try to save a file to SharePoint and see the error “Path does not exist” as shown below:
At first it might not make sense that the path does not exist when the user can browse to that path in Internet Explorer. The reason for this is that Office applications such as Excel or Word will use the Explorer view when browsing these sites, the Explorer view relies on the WebDAV Protocol not just the HTTP protocol. Users will also see the following error when clicking the Open with Explorer on the ribbon from the same machine:
“Your client does not support opening this list with Windows Explorer”
To enable WebDAV, you will need the Web Client service running. On the server you will need to enable the Desktop Experience feature:
Add the desktop experience feature then restart the server, this will add Web Client service. Once the server has restarted, set the Web Client service start up type to Automatic then start the service. Browsing the SharePoint document libraries should now work as will the Open with Explorer functionality on the ribbon.
If you experience this issue on a client machine (Windows 7 / Vista) check that the Web Client service is running.