There are a variety of ways to create a website wireframe. They include:
Drawing it by hand on paper
This method comes in handy when face to face with a client. Sketch out your layout ideas on paper, with a focus on what elements should go where.
Using Adobe Photoshop, Illustrator, or other graphics software
Most graphics software packages come equipped with all of the basic tools necessary to create wireframes. Simple lines, shapes and text (to label your elements) are all you need to create a presentable wireframe.
Using software created for this type of task
While Photoshop and Illustrator can do the trick, some software packages are developed specifically for this type of work. OmniGraffle is a piece of software that simplifies the creation of wireframes by providing shape, line, arrow and text tools to use on a blank canvas. You can even download custom graphics sets (for free) at Graffletopia, which gives you more elements, such as common web buttons, to work with.