There's a disclosure triangle to expand the Save panel into the full size one, giving access to the whole file system.
But you can toggle between the compact and full-size versions by pressing Command-= (equals).
[kirkmc adds: Nice catch. I was sure this would have been on the site, but can't find anything. It's worth noting that applications remember the state of the dialog box, so if you expand it once, they will always display the large dialog.]

