9b3eafd4_dio__that_is_the_the_question___SharePoint_Designer_2007
Can modify workflows and create custom activities. [SharePoint Designer 2007] 
Can't modify workflows and you're limited to the activities that come OOTB. See update at the end of this post.
Andrew Connell, MVP SharePoint Server - Authoring workflows in WSS v3 - to use SharePoint Designer or Visual Studio, that is the the question!
SharePoint Designer 2007