This is an updated question to an unanswered question I asked last week. Please help!
I am not able to create geotiffs on my computer, but geotiffs are created if I follow the exact same steps on my colleague's computer. He and I are georeferencing hundreds of images with ArcGIS 10. When he hits "update georeferencing", a geotiff is automatically generated, meaning that the supporting files can be deleted and the .tif is still correctly georeferenced when loaded. My computer does not create geotiffs when I update georeferencing. It just creates the associated world etc. files. I currently have to work on my colleagues computer because this doesn't work in my computer. He does not have a service pack and my computer has SP4.
Additionally, the copy raster tool successfully creates geotiffs from georeferenced jpgs on my colleague's computer. It does not create geotiffs in my computer.
Can anyone help me learn to change my settings to turn georeferenced .tifs into geotiffs on my computer?