Straight from the Horses Mouth...
Although this is already well known, this makes it official.
As I was talking to an AppleCare rep today, he told me that iWeb is discontinued. When I told him that I thought that Apple could make an amazing piece of web design software if they really wanted to, he told me that Apple was getting all the way out of the web design area, and that iWeb was never really made to do any more than be a selling point for MobileMe. This really puts the nail in the coffin. Ouch.
iWeb '09-OTHER, Mac OS X (10.6.8)