It used to be necessary when submitting a ms. for publication to
include SASE with enough postage to return the whole thing. These
days, with electronic files & virtually infinite number of copies
possible (no retyping as in the old days), can you just send a #10
envelope with enough postage for page 1 + rejection slip (or check) or
do you still have to pay for them to send everything back. What a
waste if you ask me. I have not submitted anything in a long time but
was wondering if the rules had changed.

Times have indeed changed. If you consider your manuscript disposable,
you need not include an SASE for the return of the manuscript, but
it's good form to include a #10 business-sized SASE with sufficient
postage for the editor to send you a reply. Some publications these
days prefer that you send a disposable manuscript; a few even require
it.

"If the manuscript is disposable, let the editor know and include a
smaller SASE for their reply. If you're submitting electronically, ask
the editor for submission instructions and follow them to the letter."

Essortment: How to submit a short story manuscript to an editor
http://ilil.essortment.com/howtosubmita_rdif.htm

"Always send a SASE... If the manuscript is disposable, then just send
a legal sized SASE with one stamp for a reply... Always include a
cover letter telling us who you are and what you have had published if
anything.  If the manuscript is disposable, please state that here."

Yard Dog Press: Guidelines for Yard Dog Press
http://www.yarddogpress.com/authors.htm

"If your manuscript is disposable, include a #10 SASE for the reply."

Fiction Writer's Connection: Formatting Your Manuscript
http://www.fictionwriters.com/tips-formatting.html

"We prefer disposable manuscripts... If your manuscript is disposable,
mark it "disposable" and include #10 SASE (or SAE and IRCs) for our
reply."

On Spec Magazine: Writers Guidelines
http://www.icomm.ca/onspec/Writers.htm

"Do enclose a SASE, business-sized, if you do not want your manuscript
returned?not a postcard, not an e-mail address, not a small envelope.
And do affix the stamps or else they are likely to get lost. Do write
in your cover letter that you have enclosed a SASE. This way, if your
manuscript is found without a SASE, it will be assumed that the office
lost it and you will be sent a response anyway. Do tell if your
manuscript is disposable or not."

Writer's Resource Center: Escaping the Slush Pile
http://www.poewar.com/articles/slush.htm 

Google search strategy:

Google Web Search: "manuscript" + "disposable" + "sase"
://www.google.com/search?hl=en&ie=UTF-8&oe=UTF-8&q=manuscript+disposable+sase

I hope this information is useful. If anything is unclear, or if a
link doesn't work for you, please request clarification; I'll gladly
offer further assistance before you rate my answer.

Best wishes,
pinkfreud

Exactly what I wanted. Thanks for the quick & thorough response.