Yep, basically.....most designs on the internet are created in programs like photoshop. The designs are then sliced into images (many smaller images) and then put together using html/css.

Gone are the days off just html tables for design.....

It seems like you got alot of help from the replies above though! If you need any help with anything im preety experianced with photoshop and design so dont hesitate to drop an email to me.