The "design" part of web site designing is often overlooked when creating a web site. A lot of people just use an HTML editor, with or without WYSIWYG (what you see is what you get) drag and drop, and basically build the site as they go. Its like trying to bake a cake without a recipe, and expecting a nice looking tasty cake in the end.
Photoshop allows you to make full mock-ups of each page, by basically "painting" the entire page in non-HTML. Its just a big image of what a web site will look like when completed. Its a much faster way to get through a design period, where everyone involved can contribute and make suggestions. Or if working alone, its a fast way to make changes to the image by manipulating layers, instead of HTML code.
Once finished, you can use Photoshop to slice up the image into basic site components, like the navigation bar, custom button, etc. Then you can optimize the graphics for the web. Once that is done, you can then use an HTML editor to build the actual site in code. Photoshop even helps with that part of it, if you want, but there are much better editors out there.
If you are completely new to HTML, though, its probably best to stick with a template until you understand the basics, then you can understand what you need to include on your site in the mock-up stage.