I'm not in total agreement with the "Die Photoshop, Die" sentiment in the original article, but I do think there are many benefits to mocking-up in HTML, one being that you then don't have to spend time converting the PSD file into HTML, it's already done! The other is that, yes, it does give the client a more realistic impression of what the actual final product will look like, and how it could function.
Of course all this is possible because of the improvements that are coming/have come with CSS3. The problem is that browsers still handle these things differently (or not at all). As big a fan as I am of the @font-face properties, it's still not universal, same with the box-shadow and border radius.
Ultimately I think it's going to come down to the best tool for the job, and sometimes that's still going to be Photoshop.