Creating website wireframes are a great way of blocking out rough layout ideas in a visual guide. They typically do not contain typographic style, graphics or color, as their main priority is in how the screen will function.
This video gives us a great glimpse of how that process proceeds from start to finish. The main idea is that they start off as a sketch on paper before transitioning into a wireframe in the software. Grid paper is recommended as it gives you a rough idea of the proportions on the page elements. Using Balsamiq Mockups, the author creates each page layout and makes multiple revisions before showing the final page.
The key here is that the software allows you to run through many prototypes without committing many resources to asset creation.