Hi I'm setting up a website to set up websits for business's. I will either make it from a psd>xhtml/css or just modify a wordpress theme. Was speaking to someone today and he reckons I need to have knowledge of PHP. Is this correct? I'm sure if people want a more complicated website I could base it off wordpress - and for example if somone just wants a simple site I can do psd>xhtml/css? Thanks!
Even simple sites might want a login, or some sort of database and way to access it, so having knowledge of php/mysql will help you a lot. Is it an absolute requirement, no.
Many businesses are fine with Wordpress sites that have some slight customization. You should in time work to learn how a template is made as it teaches you functionality in WordPress you'd normally otherwise ignore.
If you are going to update content on a regular basis, then I feel you should go for a CMS such as Wordpress/ Joomla/ Drupal. There are themes avaialble for these CMS. Yes, you need to know Server Side Scripting if you would like to tweak functionalities or costomize a theme.