I've only set up one "LAN-only" website: a private discussion site for some of my coworkers which ran off my work computer.

I've found W3schools.com to be a decent reference for learning basic HTML.

Part of the challenge for people learning HTML is choosing/configuring a webserver.  While it is possible to run a website entirely off your computer using a slew of hard-coded "FILE://" links, its not a good way to go.  For Windows, the easiest webserver I've ever used was AnalogX SimpleServer:WWW.  It doesn't handle any dynamic languages like PHP, but it's great for running a series of static webpages (eg pages written entirely in HTML).  I don't recommend using SS:WWW on any Internet-facing site - I've seen it crash because it couldn't handle various malformed requests that were sent by botnets looking for other vulnerable webservers - but I regularly use it for quick tests instead of more powerful and more complicated webservers like Apache or IIS.

Another tool to help learn HTML is a decent HTML-focused WYSIWYG editor.  I use KompoZer, especially when fiddling with CSS layouts.  If nothing else, KompoZer (or similarly FrontPage, if you can find it) will help you learn HOW to do some things in HTML: create a basic page with indents, lists, different fonts and font-sizes, and then study the underlying HTML code that makes it all work.

As long as we're talking editors, I also recommend Notepad++.  My day job is writing/maintaining websites, and I use Notepad++ for everything.  It doesn't have some of the fancier features of other more-focused editors like TextMate (for the Mac), but they syntax highlighting, tabbed sessions, and integrated file browser (via the "Light Explorer" plugin) fulfills my every need.

I built a website with a WebTv set top box the first time I ever got on the internet...piece of cake!