Steve Jobs on design: “Most people make the mistake of thinking design is what it looks like. That’s not what we think design is. It’s not just what it looks like and feels like. Design is how it works.”
This is as much true for websites, as it is for the products that Steve Jobs is talking about. Old news for some of you I know, but I like this quote, as it gives clear value to the visual and to the internals. On websites it is easy to see the visual, and be aware that some where in the background there is a server with code on it.
The bit in between those two is my domain these days. None of it is code, very little of it is visual design, it is the "how" that is important for me. The intangible nature of it makes it hard to explain to people what I do, as the design word just means visual communication these days. I end up clarifying and calling it product design, service design might be better, but both those mean different things in other industries.
I'm at the interaction design training course next week, given by Bruce “Tog” Tognazzini, as part of the User Experience 2006 conference. I'll also be attending the Scott McCloud day too, which I'm equally excited about.
Both these training sessions and various conferences (etech, xtech, sxsw, reboot, lift etc) give a gesture to the space I work in, probably most formally taught at the RCA Interaction Design course, something I'd love to have done. I find process, or workflow, and psychology are the key to understanding what to build and how to support the context of action, or understanding, which is your purpose in creating the website.
Happily, I'm by no means alone in this space. The closer websites come to being part of social interactions the more important this becomes. We've moved through several cycles in web development, from brochures to shops to the rich ecology of interconnected services we have today. Each time the human involvement is richer, today we have the chance to offer up more of ourselves to the internet, the architecture of participation as Tim O'Reilly and others put it. danah boyd has done a lot to promote this thinking too, culminating in a cfp for a special issue in the Journal of Computer-Mediated Communication.
If we are to make websites that involve humans then we need to build products that fit in with their psychology and pick tools that allow us to do that, one of the reasons I'm a fan of Ruby on Rails. This also means a displacement (not removal) of the content producer (publisher, broadcaster etc) as the most interesting conversations are not one way. Again there is nothing new in this, collaborative media tools have existed for a long time, but now it is not just an mass amateurization, but one that draws on the media consumer, bringing them to the fold.
The ongoing race of media companies buying social tools (YouTube, Reddit etc) is a key sign of this. However it is not spray paint, you need a passionate desire to engage your audience / readership if you want these tools to work. I'd argue that this needs to be engagement with your content, not a separate community space. A weakness of Comment is free is the lack of engagement on the behalf of the Guardian columnists, whose content is put on that blog. Top marks for taking on this project, but CIF shows that there is more to this than a comment box at the end of each article.
To return to my point, much of the new web thinking, beyond the tech, is psychology in a different branding. Sociology gets a lot of attention, but I think psychology and how humans relate to information has much to offer. These social sciences are the key to making good web products and knowledge of them needs to spread out beyond the niche interaction / product design fraternity to visual designers and programmers, so that they can be empowered to make intuitively good choices.

I couldn't agree more with Steve Jobs' sentiment ... the key word being works (in a sense greater than mere "effective operation").
However, I don't think the sentiment expresses anything particularly new; designers and artists, for their part, have always been aware of this fact. They are often restricted in their ability to implement this in practice due to straightjacketing their role and/or an alienation from that which they are designing for.
Additionally, I would be wary of utilizing the word psychology in relation to those intangible aspects of interaction design; psychology has an inherent tendency towards a dualistic representation of the object of its inquiry which undermines an understanding of the essentially holistic character of true design as a phenomena.
The above factors combine to aestheticize design, reducing it to the realm of "appearance". True design is to "devise", "mark out", "signify" a realm and means within and through which enagement and action can occur.
I think you hit on a vital point when you infer that a passionate desire is an a priori condition of such works. A designer cannot design for that which s/he is not always already within, engaged with, or part of. This is why the vast majority of design is bad design.
Software and web development has an onmipresent desire to separate concerns. In most areas of endeavour, this can be perfectly valid and pragmatic. Yet, in design, this is not the case. One needs to be careful not to further reduce (in the sense of reductionism) design by abstracting it further into distinct regions (i.e. visual, interaction, information etc).
Naturally, more than one single individual is always "the designer" of a particular "work" (the use of the word "works" in relation to that generated by the creative arts is no coincidence!), but it is of vital importance that this is a collaborative endeavour where the work works by working together in an engaged way towards the demarcation of a previously undefined shared space.