Adobe software is really good; remember that they obtained and improved Macromedia software packages aswell. You do not need to buy them all, I recommend buying one.
The beauty of using Adobe software is that there is alot of support, tutorials, and in particular ready made templates, plugins and shaders. Their software is also scriptable, so if required you can automate stuff.
I'd pick one of the top packages for the whole job.
Consider that InDesign, Photoshop, Illustrator, Dreamweaver, Flash and to an extent After Effects can ALL make a websites on their own!!!
The difference is the type of website you can make.
(Note that I work in the industry part time, and used to work for a design firm)
Illustrator: Slice based webpages with lots of image work. It also has dynamic data variables and there are some JS/VB scripts you can download for Illustrator to automate certain tasks ( As with most of their software)
Illustrator can also export SWF (Flash files) by using layers as frames. The newer versions have video creation now.
Advantages: The very best at vector art based websites (IMO). You can also object orientate with photoshop files or other image formats. I'd settle for Illustrator all the way if you are going for the arty look. You also get web optimization tools.
Disadvantage: One page at a time. No code editor. No inbuilt FTP file uploader. No dynamic content facilities.
Photoshop: Similar to illustrator in terms of what kind of website it exports; only you sacrafice Illustrators vector tools for the advanced photo manipulation tools in photoshop. Photoshop is a house hold name for a good reason; "it can do anything", you can make one face look like another, you can make a elephant look like an anteater!
Advantages: Just check out
Bertmonroy's stuff. Nuff said!
Disadvantages: Difficult to create large websites with. Organizing lots of elements requires extensive skill and care. No FTP.
Dreamweaver: This the one to get if you want to create dynamic websites; it is half page designer half programming tool. It also comes with an FTP uploader, which can also synchronize and features check in check out operations like SVN. This is a good tool for collaboration, but it features very basic graphic design tools. I've used it since version 3, its a bit laggy these days but I use it for websites, XML and for printing dynamic reports (if I could not do easily in Excel)
Advantages: There is no other one to pick if you want to work with CSS, Javascript, PHP etc. Forget the other tools if you want to create forums, complex forms and advanced controls. You can download Notepad++ to do the code for Photoshop/Illustrator; but having the FTP automatically save changes to code directly on your site is essential for collaboration and speed of dynamic content production. This is standard in DW.
Disadvantages:You'd need to outsource graphics if you want to make a nice looking website. MS Word has more drawing tools than Dreamweaver; put it that way.
InDesign: Illustrator with pages, but with less artistic tools. If you are designing magazines for print and web; pick this tool because you can harmonize your sites and print work more easily. It has some hyperlink tools and dynamic variables to make life easier. The best part about this tool is background pages (parent pages); one page can use the content from another; this is vital if you are doing multipaged content. In illustrator you would have to place a reference to another document, with InDesign you can reference pages & documents, and photoshop files, images, illustrator files and by no means least PDF files.
Advantages:More artistic than dreamweaver and good for print. You can deal with 1000s of elements and pages all organized into pages, layers and styles. Illustrator only has one page per document. InDesign has more paragraph and text tools.
Disadvantages:No FTP, no code editor. Drawing tools are simple compared to Illustrator drawing tools.
After Effects:Photoshop with animation. Flash with pixel shaders. This is good for cinematic websites. Good for creating websites for movie trailers and stuff. It is uncommon to use this tool because it is used for large production compaigns, but it is worth a mention. I recommend this OVER Adobe Premiere for the internet; it is more creative. Premiere is more for mixing video , whereas you'd be using more special effects than video mixing when creating cinematic websites.
I won't talk about advantages and disadvantages for this one because it is simply the tool specifically for motion picture with special effects that you can render to Flash SWF files.
Flash I prefer Silverlight for programming, I'd rather use C# or Visual Basic over Action Script any day every day. Use Flash ONLY if you want to specialize in banners, animations and online adverts. Flash interfaces are over the top for average customers, unless you are
2Advanced Studios.
Advantages:Illustrator with animation frames and action script; it even has some of Photoshops filters. If you are into artistic websites with animation then choose Flash.
Disadvantages:You can build dynamic websites (forums and forms etc) with flash using action script; but the support is not as good as with HTML.
Silverlight+Expression BlendEasier to create dynamic content (forums, complex applications and games) than Flash; it is just a newer technology and thus less people use it. I prefer Flash over Expression Blend for drawing. Expression Blend is more programming based than drawing based; there are not alot of drawing tools in it.
Advantages:Better apps than Flash more easily; unless you are an Action Script expert. You can use it for free using Web Developer Express; but not Expression Blend. You get to use some of the .NET Framework as well. Silverlight apps can easily be converted into Windows Presentation Apps using Visual Studio. If you like ASP, there are some automatic ASP integration tools available. You can put Silverlight apps behind HTML text[/b]
Disadvantages:Expression blend is a bit thin on the drawing tool side. Less popular, so some people might not want you to make their website in silverlight. I think; not 100%, that you are forced to use anti-aliased text, they may have fixed this. Sometimes anti-aliased text is not good. Flash can use both forms of text[/b]
Blender, GIMP and the tools that Zenassem pointed out can be used to make up for missing features, but I'd get at least one Adobe package; it does not even have to be new; even Illustrator 10 (CS-1) and Photoshop 6 can do some really cool stuff!