Resolution may be thought of in terms of

DPI	dots per inch
PPI	pixels per inch

The higher the DPI or PPI, the more dots that are in an inch and generally, the better the image quality and the larger the file size.

The most important elements of resolution are

Screen resolution and Printer resolution

Screen Resolution

Consider an image of 320*240 pixels

If the monitor is set to a resolution of 640 * 480, the image will take up a quarter of the screen.
If the monitor is set to a resolution of 1280 * 1024, the image will appear smaller.

The PCs in the PC suite are set up so that you should not be able to alter the screen resolution, but they do sometimes get changed. When set to a high resolution, text appears very small and you can fit quite a lot on the screen at once. For lower resolutions, text is larger and buttons are larger.

If you take a screen of 12 inches by 9 inches, the screen resolutions equate to the following DPIs:

Screen Resolution	DPI
640 x 480	53.33
800 x 600	66.67
1024 x 768	85.33
1152 x 864	96
1280 x 1024	106.67

Don't make the image bigger than the screen

Especially when designing web pages, consider the screens people may be using to view your pages. If you design a page on a big screen, and it looks great, remember to try it out on a 15 inch monitor. If people have to scroll down for some vital part, they may not ever see that information.
Also, if people have to wait ages for a huge image to download, they may give up and go to another page.

Printer resolution

The advertised resolution for a Deskjet 1220C is 600dpi (though they claim 2400x1200dpi with HP Photoret III Precision Technology)

The advertised resolution for a Laserjet 4500DN is 600dpi (though they claim 2400dpi with HP ImageREt 2400)

The advertised resolution for an Epson Stylus Color 900 is 1440dpi

Do not be misled by this.

If you took the Epson figure literally and tried to print an image of 1440 ppi . . . .

That is 14400 *11520 = 165,888,000 pixels
and the file size would be that number of pixels multiplied by the bit depth - for a 24 bit image, about 500 MB.

If you tried to print an image of 1440 ppi . . . .

1. No machine in this department can handle an image that enormous
2. The printer would throw most of it away

Printer dpi is NOT equal to pixels per inch

That is because each pixel is made up from dots of black, cyan, magenta and yellow

For an image of pure black and white - that's no colours and no greys - then a 600 dpi printer could print a 600 ppi image exactly, without throwing any pixels away.

For colour or greyscale images, then the impression of each colour is given by dots of the different inks and it may take four dots for each pixel.

Image resolution should be 1/4 to 1/2 printer resolution

For a 600 dpi printer there is no point in sending an image of resolution greater than 150 ppi

If half or three quarters of your image is going to be thrown away, it is better that you choose how that's going to happen rather than letting the printer throw away random pixels.