Suzanne has mentioned several great tools for designing websites. Many of them have Library 2.0 applications, but how can you combine all these tools and create an interactive and valuable website that is also user friendly? One tool for doing this is Drupal, a content management platform. - Whatever that means :)
Drupal is open source software that will let you create an interactive website of any size. It is not as easy to use as some of the tools that Suzanne has mentioned. It has different layers from fairly simple to complex, but for those of you who want a more robust website it might be the perfect tool. You can learn more about Drupal at http://www.drupal.org.
The Librarian in Black has also recommended LibrarySite 2 from the Cherry Hill Company. The Cherry Hill Company uses Drupal as a base and then works with the library to design a customized website. This is a consulting firm, so there probably is a cost. This may be a better option for academic libraries or large public libraries, but I wanted to mention it. Learn more about LibrarySite 2 at http://www.chillco.com/librarysite2. You can also read the posting from LibrarianinBlack: http://librarianinblack.typepad.com/