I prefer using a PHP version of Eclipse with Komodo Edit being option 1B as my IDEs of choice.
I hate to jump in and only answer the original questions, but I think that it could be useful. I'll just give my own preferences:
1. A Web or Text Editor
A: I use Notepad++ as my code editor. I love the features that it has (tag highlighting, auto-indent, keyboard shortcuts for firing up webpages in different browsers, read through the documentation for more) and think it's very useful. I'm still unsure about what exactly Contribute does. All of the Adobe product descriptions are super confusing for me. I know for sure that Dreamweaver is a code editor, so I'll assume that Contribute doesn't have a code editor as that would be somewhat redundant. I think Contribute does back-end stuff. Anyways, Dreamweaver is a good code editor - but not a good WYIWYG (although that's an oxymoron). It's good, but not worth $700 (or whatever it is). I would just stick to a free code editor.
2. An FTP (File Transport Protocol) is a program that uploads your files to the server that you host your website on. When you register your domain w/ places like GoDaddy.com or Hostgator.com, you're buying space on one of their servers (a big computer that has the website files on it and sends it to people who want to visit your website so that you can see it. The FTP client (program) on your computer sends the files of the website that you've created to the server (GoDaddy, HostGator, etc.) so that people can see your website (b/c the visitors contact the server, not you at home). Filezilla, as mentioned, is a free, fast, and easy FTP client that should fit your needs. For me, Filezilla does what I need (upload stuff to the server), so I don't see any need to pay for an FTP.
3. I would recommend Photoshop. I think it's a great program (albeit expensive - but I'm a student, so :D Haha, suckers!) but takes a while to learn (I've been tinkering for maybe 5 months and don't know the entire thing :/ ). It's a super powerful tool that's absolutely packed with features that can help you out. GIMP, as noted, is similar to Photoshop - the main difference being that GIMP won't burn a hole in your pocket. I would buy Photoshop from Adobe - genuine copy that will most likely have no problems. If you're worried about cost, check out a subscription plan. Try it out for a month ($30 USD) or buy it for a year ($240), and then see if you like it. Of course, there's always the trial, which will come out after the release. You can also try the Beta edition, which is absolutely free until the release.
I know Notepad++ gets repeatedly mentioned, but if you use something like PHP, it simply isn't going to compare to other PHP based IDEs. I tried it, and it was uninstalled shortly after.
Eclips was good enough but I use it for Salesforce Programming.
I also really like some of the suggestions about Wordpress. Wordpress is a great way to create an easy to edit website or blog. Wordpress has many "themes" available both for free and purchase that you can use to create a nice looking site fairly easily. Think of them as templates. Note though that if you need to modify a theme yourself you will not only need to know HTML and CSS, but some small amount of PHP as well.
Books are really helpful after you get going. I am a book fiend and because I am trying to learn PHP to a high level, having 2-3 good books in addition to taking an online class / tutorial is a big help. Each author provides a different perspective and after awhile you get a really great idea of how to go about things efficiently (assuming the books are good).
Don't waste time and just jump in. It's the best way (no fear!)
Best of luck
Espresso is a nice product. I didn't end up using it, but it was one of my favorites. CSSEdit is awesome. I have both Mac and PC so I like my tools crossplatform. :)