For all my coding needs, I use NetBeans with PHP - kind of good for a freeware which has inline code support. Though it relies on Java and needs it to be installed, it still is my preferred choice. Dreamweaver is good but expensive and I cannot afford that. I have also used NotePad+ for coding but that was when I was doing only xHTML and CSS kind of websites.
For designing, though I am not a designer, I normally use GIMP (freeware again) but then there are days when my clients give me PSDs to translate into websites and for that I do need Photoshop. One of my clients has given me a Portable version of Photoshop and it works for almost all the slicing etc that I need.
I use Dreamweaver or notepad or the visual template system in the selected software like Wordpress. Most of the time it depends what machine im working on , where i am and whats more convenient at the time.
For the actual design process whether it be a PSD , simply image editing or something i use Photoshop all the time, illustrator if needed and also fireworks. Ive yet to find a graphics program which im comfortable with other than the adobe Suites.