Shockingly, Web Designers should know how to design for the web, not just for Photoshop. Its a point that was driven home during my recent trip to California for Forum One’s (my employer) Online Community Summit. While I may not have done a comprehensive survey, I visited another web company there, and also met a number of folks who work in Silicon Valley. The former shared that their internal IA/Interface team were proficient in CSS/Javascript/HTML and used their skills to produce HTML prototypes, not sites idealized in Photoshop. Similary, another person who described there job as a "designer" involved the complete lifecyle from paper prototyping, html prototyping, to final development.
A post on 37 signals, where someone asked "Do I need a designer to make pretty?"
Thinking of designers as someone who paints the application pretty in Photoshop is a common but unfortunate misconception. We certainly don’t have any designers like that. Instead, our designers apply their talents to the native materials of the web by working directly with HTML, CSS, and occasionally Ruby code or JavaScript.
That said, having good visual design skills is pretty hard. There’s a whole set of right-brain skills that can be harder to excercise, hone, as you can clearly see on my sites.