This is an "unmasked and umblended" save. This is how PW4 saves the PSD file. If you have something like "enblend" you can then blend the layers together or you can create your own masks and blend them using photoshop tools.
There are some actions out there that can speed up doing this manually in photoshop.
Saving to PSD is usefull when you need to fix missing people parts or other "moving" things in the image that get chopped off or otherwise messed up due to motion.
If you are trying to fix "exposure" problems between frames this option won't be of much help as your image will still suffer regardless of how you blend the frames together.
For this you need to shoot the scene correctly. Or you can fix some of these problems by shooting RAW and adjusting exposure in your RAW converter. If you dont shoot raw then you will have to color balance each frame first then stitch. If you still have problems then there is always the patch, healing and clone tools.