Do I want a Website or a Blog?

Do both!

You will probably have to purchase web hosting, but I do most of my images through Flickr, with a pay ($25/year) account. I'm a photographer, and run a website/blog here: http://benpeoples.com/ where I blog about what I'm working on, post random photos, but also have several pages of information for people looking to hire me.

I'm a big fan of Wordpress, you can play with it a bit with a free account, and it's super-easy to set up on your own hosting.

Dynamic content (in your case, a blog) will help you get found much more easily than creating a static "web site". Here's my argument for blogging as a tool for business development: http://www.markbixby.com/blog/entry/traffic-or-findability/

As far as your CMS (Content Management System) is concerned, I'd take a close look at http://www.expressionengine.com Their core product is free, with many customizable templates to choose from.

I'd suggest against any of the commonly thrown around CMS's, such as Wordpress, Drupal, Expression Engine, or Movable Type. Having lots of users doesn't make something great (just look at myspace *shudder*). I myself am a ruby and rails fan, and would suggest Mephisto (http://mephistoblog.com/) over anything else. And I definately concur with ben, Flickr is the way to go for photography hosting - it's an absolutely awesome service. I must say I am a very happy customer, there (-;

You may also want to consider using Textpattern (textpattern.com). Textpattern is a really great open source publishing tool that can power both a blog and a full website. Textpattern allows you to modify the core without hacking it by adding modular plugins via the database. It's also got a really great 'form' system and templating system.

If you don't want to deal with all the technical issues, it's really easy to sign up for an account at Wordpress.com and start your own blog. Blogs hosted at Wordpress are also easily found on search engines like Google, so this would also mean maximum exposure for your work. However, the amount of images you can upload there is limited, so perhaps you might want to take a look at Zooomr (zooomr.com, three o's) which allows you to upload an unlimited number of images for free (as opposed to Flickr, which has limits unless you pay). Using both Zooomr and Wordpress.com allows you to easily (if you have any questions you can ask them here, of course ;) start this blog without any costs.

Why stop with a blog and site? You definitely want a site linked to a blog, but what about a twitter account for the biz that fans can follow? Or a facebook site where you can keep in touch with your fans? You need to leverage all social media.