To expand a little more on what ImageReady is for, it was originally intended as a standalone program for editing images for the web. It included such things as image slicing and the ability to save the slices complete with HTML code to reconstruct the image on a web page.

What you were meant to do was do most of the actual bitmap editing in PS, then switch to IR and do the slicing and dicing. There's a button on the tool palette in CS2 and earlier to do this (and one in IR to switch back to PS), but it was slow and a real pain on a laptop with limited memory. In CS3 and above most (but annoyingly, not all) of the functions of IR were included in PS itself, and in CS3 and above IR is no longer included.

For more info you can also see http://en.wikipedia.org/wiki/Imageready.

Steve