By default Windows Grep creates names like this when replacing:
MyFile.txt.BAK
MyFile.txt.NEW
If you would prefer the existing extension to be dropped, and the new one appended, select Preferences from the Options menu and select the Compatibility tab.
Checking the ‘8+3’ box will force short filenames to be used.
If you are using a Novell network, you may need this option set if your server does not support long filenames.