ASP.NET files - the markup files and the codebehind source code files - are all just text files. You can use any editor. DW makes it easy to upload and test on servers. You certainly can use DW for ASP.NET.
Also consider that if you are noob you will need to rely on advice and experiences of other developers. They will almost exclusively use VWD.
You can use dreamweaver, but i would also suggest VS WD. Its free and very powerful. As i prefer using .cs pages(code behind) so that all the code is not in the aspx page, which is not supported by dreamwaver.
And as for asp.net being more flexible than classic asp... Without a doubt. It is a lot better and a lot more powerful
Express is free. The other editions (Standard, Professional, Team) carry a pricetag and have more features. Look up the edition comparison on MS site if you are interested. If you are just starting out you should use the express edition until you know whether you need additional features. Note, the extra features has nothing to do with what you can do with ASP.NET. They are all in the "productivity department" e.g. integration with source control, profiling, integrated web/load testing etc. You can code the exact same sites with the express edition.
That is an ongoing debate of who should use what language. Well, I would say it comes down to budget. Generally the costs of hosting asp.net is more than PHP, altho not so much these days anymore, so it would come down to personal preference.
And i prefer asp.net over php. I just like the fact that I can have my code and html seperate. Which makes it much easier to read. Another benefit is C#/VB.NET, the code used for asp.net, can also be used to code windows programs. So you only have to learn 1 language if you ever do want to do windows appz.
Hosting companies who offer both generally have exactly the same price, also the low-cost ones. Case in point: godaddy.
In my humlbe opinion ASP.NET is more well designed in many areas (and less in some). ASP.NET is much stronger in composability; the ability to turn often used parts/widgets into truly reusable components or use built-in or 3rd party components.
Note also that while both PHP and ASP.NET can be used for building websites (and as such you can compare them in a number of disciplines); PHP is a script language where ASP.NET is a object-oriented framework with C# or VB.NET being the most commonly used programming languages for that framework. There are several open source frameworks for PHP, although most PHP developers still seems to be rolling their own.
And ASP.NET has LINQ, LINQ to SQL, LINQ to XML etc.
I would choose ASP.NET over PHP any day. But then again I'm primarily a .NET guy now. I hope I have written my last PHP. If your objective is to port a simple classic ASP application I would still advice you to look into PHP, however.
I know php fans would disagree with me but I have always found the comparrison laughable really. JSP would bear far more comparrison to .net but since every microsoft hating geek out there uses php, sorry I mean since php is so popular then it is constantly compared to asp.net.