How do I create a Navigation bar? Help!

I think you could do something like this with CSS and the "Sliding Doors" technique from www.alistapart.com. You would just have to modify the active state settings to achieve the larger effect.

If you don't know about CSS yet, I recommend you look into it. It makes developing a little more painful at first (but once you learn the tricks, its pretty easy), but makes maintenance and redesigns a breeze.

Slow down buddy!

You aren't going to be able to learn how to do everything at once. Photoshop is something that you should really know how to use. You don't necessarily need to be really good at using it, but some basic knowledge of it is a giant leap from having no knowledge. Start playing around with it, look at some tutorials on the web. Photoshop is a hard program to learn to use 'like the pros'. So be patient with that one.

Check out the black or blue style on my website (signature). I used only CSS and HTML to make the tabs for them. This may be a better starting point for learning how to make nav bars. The site you pointed out uses on large image as the entire nav bar and an image map to decide where the different areas are. Generally, this is a no-no in my book.