Select Write from the Block menu to save the selected portion of the file you are editing into another file. If the other file already exists, EditPad shows a warning and if you confirm, the other file is overwritten with the selected portion of the current file. If you want to add the selection to the file rather than overwrite it, use Block|Append instead.
If you do not specify an extension for the filename then Block|Write adds an extension depending on the file type you selected in the dialog box. This follows the same rules as File|Save As.