Personally I wouldn't use dreamweaver till you have grip on the basic stuff on html and css if you haven't already. Dreamweavers very powerful and pretty nice. I create pages with plain text editors like BBEdit, HyperEdit, subethaedit, or the like, but I don't think that type of style is for everyone. Photoshop is a good program to have for graphics and pretty much I do everything with PS.
As for blogging software I would probably recommend like many, Wordpress. I have been using pMachine for a while since it came free but they have moved on to another system and pmachine is now i believe out of support. Wordpress is very nice, and a huge community to back it, so finding help is probably no problem. Another one I would consider is mb Text Pattern but i have no experience with it. Something else you could look at depending how adventurous, is Typo which I have started to toy around with. Hope that helps.
RapidWeaver has to be an excellent piece of software for any level of webmaster. Look at my site at http://www.sebpayne.com. I customised the 'theme' using CSS and I am very happy with it.
It includes a blog function, WYSIWYG editor and a HTML page where you can enter raw code. It has great intergration with iPhoto (photo galleries - look at the photos on my site), iTunes and iMovie.
For blogging software, I highly recommend WordPress. Admittedly it's the only blogging platform I have experience with but I'm very happy with it. And with the imminent release of WordPress 2.0, it's only going to get better. Check out the Theme Viewer for a look at some of the available themes.
When I work with php/mysql/xhtml/css ususally just use TextWrangler in combination with Cyberduck (I know TextWrangler has built-in s/ftp support but I like working on my own machine and then upload). Handcoding rules!
But with Dreamweaver you can make very nice templated (x)html pages, eliminating the need for php for making headers, menus and footers (if you don't want to or cannot use php or even if your server doesn't support it). And added bonus is that Macromedia has finally gotten Contribute to work properly with version 3, so when you've made the template with design and maybe a navigation systen and a few main pages, "anyone", regardless of web creation skills, can edit contents (designated areas on the pages) and add new pages. Very handy for situations where several people contribute with contents to a site.
Then I manually pic apart my images and create the HTML and CSS until I get a website using Dreamweaver 8. If I'm extra frisky I'll use bbedit, but I usually stick to DW8 because I'm very familiar with the process.
IE - rejuvene.net (copy paste please )
I have a custom CMS solution for my clients and depending on their budget they may or may not get it.
I do rough layouts in Illustrator, build the actual site graphics in Photoshop, and then code everything with Textmate (www.macromates.com). I also use Transmit (www.panic.com/transmit) for FTP.