Web development noob question: what's the general process of converting a mockup (on a paper) into html code? Separately, do professionals do their work on photoshop and simplely convert the psd to html? Does anyone handcode their html?

A professional web developer will hand code html.  But they won't be starting from scratch.  They will have templates and snippets from prior experience.  And there are plenty of frameworks to help the process.  Usually a developer will learn one or two and stick with them.  Try http://www.initializr.com/.

In an environment where you have separate designers and developers you’ll usually see the design created in some sort of graphics software (i.e photoshop) and then code based off of that. In the shops I’ve worked at I’m usually provided the photoshop files, and some sort of technical specifications detailing things like intended functionality and transition effects.In a step format it might look something like this: Initial contact with client to discuss requirements Design comes up with design and goes through revisions with client Developer is provided design files, usually accompanied with design discussion to clarify any ambiguities. Developer codes up site based on design files. While this process has it’s faults it benefits from having the client who’s site your building sign off on the design prior to development.This is the way I’ve seen it done, but there are many other process depending on the company and individuals involved.