You can use Photoshop for the entire process (it's been a standard for movie posters for almost 20 years) except actual vector drawing (although even there, it's getting more versatile). Dan Sorenson's excellent "Photoshop CS2 for Advertising and Marketing" has examples ranging from comic book art to highway billboards.
The big trick with text in Photoshop is to save as PDF for output to print, which preserves the vector information in the text. A native PSD is read by most applications as a raster image (using the flattened raster image that is saved in the PSD). PDF avoids that problem.
To reinforce what DA01 said: almost any designer works with multiple tools. The Adobe Creative Suite is called a "Suite" because the tools work particularly well together. You can't do top quality work with only one program. Screwdrivers makes poor chisels, and vice versa.
InDesign is the hub of all my print work, because it has excellent vector and raster effects capabilities built in and it's WAY faster than Photoshop for accurate layout. Photoshop is my support tool for fancy raster effects and occasional type effects that InDesign can't yet do, Illustrator for vector art that's beyond InDesign's capabilities.
As an example, here's the Photoshop part of a full-page ad (although it could easily have been a poster). The headline text effect was easily done in Photoshop, and in the rush (I had about an hour to create this) I didn't think to just do it in InDesign. The supplied artist photograph cuts off just to the left of the performer, so the "beams of light" were added in Photoshop along with the extended background.
I did everything else in InDesign: