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While I do think designing in the browser is the way forward, CSS3 basically turning the browser more and more into Photoshop, there’s a few things to keep in mind.
Right now(!), designing in the browser is both restricting and liberating at the same time. It is liberating in the sense that you just use whatever is available to you through CSS, be it 2.1 or 3, right now with progressive enhancement / enrichment in mind for less capable browsers. The client uses their own browser of choice to see the result and either sign off or tell you to change stuff which should be rather easy.
It’s also restricting in that you won’t use the stuff that you don’t have at hand because CSS doesn’t provide it (yet). This restriction becomes more apparent when comparing it to designing in Photoshop where basically anything is possible and designers, especially the ones coming from print, will use whatever they please.
The result, therefore, of designing in the browser can be a bit simple compared to something designed in Photoshop. A lot of clients in the real world, where you cannot simply assume the outcome to be anything like the nice story Andy tells here, just don’t want a less is more simple design and ask for a bells and whistles Photoshop version instead.