CS5 is as good as you can get. I don't know any alternative apps that are better then those in CS5, especially Photoshop CS5.
As for Dreamweaver, there are some excellent new features introduced in CS5, like full control over CMSs by connecting all files together making it easier to work with and see your changes in real time. There are also some new web services you can use as a part of CS5, like Adobe BrowserLabs for cross browser compatibility check. There's a new site management system, new "Inspect" tool for live view and, my favorite, improved code completion with integrated PHP documentation. There are also a lot of small tweeks and adjustments. My say is, if you want to make some money in web design business you go for Dreamweaver. Knowing that average project income for small business web sites is about $1000, Dreamweaver definitely isn't expensive. On the other hand, if you want to learn web design and don't want to spend money on Dreamweaver, you can always use
Aptana Studio. It's free, Eclips based and has a lot of nice features, plus it's cross platform.