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@Meagan Fisher: I totally agree that if you’re designing a web page, designing in the browser can be way faster and easier than designing in Photoshop, but PS still has a place in the world – for doing digital photo composites, complex photo-based designs or any other manipulation of raster images. If you’re site has mostly graphic elements that can be represented by vectors (lines, circles, etc.) then this approach works great, but if you want to do anything more than work with colors, fonts and basic shapes, you’ll need PS.
@Naomi Niles: You want a website design and layout tool that let’s you create designs as a designer, but that generates the web page for the developer? Ever try Expression Web? It’s actually pretty cool.