I can't publish an update to my Web site.

Where are you hosting your site? MobileMe? MobileMe has been shut down since June 30th of this year. So if you still are trying to publish to MMe you'll need to obtain a new hosting service.

Since you're using iWeb 2 (08) you'll have to publish your site to a folder on your hard drive and use a 3rd party FTP client like YummyLite, Cyberduck, Transmit, etc., to upload your site files to the server.

This should be of help to you: Life After MobileMe.

OT

Some people have also had issues with iWeb '08 & Lion/Mountain Lion

I think Jeff has hit the nail on the head. More than just some people have had problems with iWeb 2 publishing to a folder with Mt. Lion .

You probably would be best served upgrading to iWeb 3 by purchasing a copy of the iLife 11 disc from a 3rd party retailer like Amazon.com: iLife 11. You'll also get iDVD 7 in case you ever get a new Mac which will not come with iWeb or iDVD.

Why upgrade iWeb when you can get Flux plus 6 months hosting for $29...

http://www.macsuperbundle.com/?rs4=NO_US_EM_SB_MACWORLD_1112_BUY

... plus a lot of other stuff!

That's a great deal if only for Flux.