I'm a big proponent of setting up a local playpen for development. If you need PHP/MySQL to render the pages correctly you could set up something like WAMP (http://www.wampserver.com/en/
) which will run apache/mysql5/phpmyadmin/php5 on your local box without requiring any complicated setup or mainenance. You can even make the webserver online if you'd like to use a box of your as an actual webserver. There are similar solutions for JSP/Tomcat and RoR.
Of course if you work on a Mac most of what you need (apache/php/ror) is already installed.
This way you can develop everything separate from your production server, and simply upload it when it's ready. This also allows you to make changes later on without fear of screwing something up on the live server, so you can deploy it when it's stable.
To answer your question DW 2004 uses their own rendering engine for design view, so there's really nothing you can do to improve it. The only compelling reason I've ever had for using Dreamweaver was that it was a pretty good source code/CSS/PHP editor, but there are plenty of great solutions out there that work.
What I would suggest you do is download WAMP and set up your box to develop locally, use a good css/html/php editor to edit code, and your own browsers to view the site live.