All web sites have a purpose and goals. Based on those, an Interaction design (IxD) can be created to specify how the site should work. Graphical design build on the IxD to define how the site feel and look. Implementation then actually make it work.
My IxD method, as outlined elsewhere, is based on the problems and issues that the site owner and visitors encounter. Together with pattern languages and user testing, a prototype (often on paper) is created.
In graphical design, color and shape are used to further the goals of the IxD. Relative importance of elements, relationships between elements etc are communicated via graphics. The grahpical designer is also in charge of creating a visual identity for the site. That the identity is suitable and polished is important–studies have shown that the visual design of sites greatly impact visitor’s confidence. While designing, IxD issues will likely come to the surface and will need to be addressed. Delivery is often in the form of user tested digital prototypes.
Implementation is of cause the stage where the site is built, both on the front- and back end. During the build phase several IxD and visual issues will surely be discovered and will need to be addressed. Since the IxD has been done thoroughly the issues will likely be small and easy to overcome. After user testing the site is ready to go live and the circle starts again.