Does Imar's book have you create a web site from start to finish?
Yep, it does. In Chapter 1 you'll start with File | New Web site and you'll build a fully functional, database driven web site in the remainder of the book with tips and tricks for deployment in Chapter 18.
Is there a more recent version of the book, or should I care?
No, and probably no. I am currently working on the 4.0 version of the book, but it won't be out for at least another 5 or 6 months or so. For Beginning ASP.NET 3.5, this book is as fresh as it gets. Note: after the book was released, Microsoft released Service Pack 1 for VS 2008 and ASP.NET, resulting in some changed behavior. Check out the errata section to get a list of the relevant changes and a solution.
You'll find that most concepts in the book still make sense today, even though the book is getting a bit older. The only exception might be LINQ to SQL. Since SP 1, Microsoft is steering you in the direction of ADO.NET Entities instead of LINQ to SQL. However, the two have a lot in common, so what you learn in Chapter 13 about LINQ to SQL can still be used for a great deal when you start using the Entities Framework. In addition, LINQ to SQL will be part of .NET for the foreseeable future, so you can still make use of that if you want.