Is creating websites with photoshop and then Dreamweaver a professional process? Do professional web designers create their sites in Photoshop or is that sort of cheating? If you create your website template in photoshop... will it be picked up by Google? I am trying to learn how to make high-standard websites so I want to make sure I am getting it right! Thanks for your help!

If you are talking about slicing up templates in photoshop then the only real problem is file size.

Google doesn't care about how you make your site but they do have a rather complex search algorithm that does come down against slow loading sites ... so it does pay to keep those file sizes under control.