fhotoace Answered:
DPI (Dots Per Inch) is a relative term.

If you are going to display it on a webpage, then you only need 72 DPI.
If you are going to print these pictures, then you will want 300 DPI.

A 12 MP picture is more then you need for the web, and will work fine for printing.

If you are taking pictures for the web, set your camera resolution to 1024 by 768 or less.
If you are going to be printing those pictures, then use the highest resolution setting.

chathound2005 Answered:
dpi or dots per inch and ppi or pixels per inch, are just tags in digital photos, they don't really mean anything until they are displayed on some kind of device or printed out at a specific size. Ignore them. I can take a tiny half a megapixel image and change the tag to 600 dpi, it won't make it any better.

So a photo can have 400 ppi if it's a small print, and then go down to 100 ppi it it's a massive 16×20 print, but it depends on the pixel count of the camera.

If you don't plan on printing anything more than 8 x 10 inches, don't worry about dpi or ppi tags.

example, let's say a compact camera has a resolution of 3000 pixels by 4000 pixels. Multiply that, it's 12 million or 12 megapixels.

Now you want to print out a 5×7 inch print. Let's take the long side, 7 inches divide that into the long side of the digital image (4000 pixels) you've got 571 pixels per inch. Go up to a 16×20 inch print. Going by the long side, you've got 200 ppi.

But resolution and pixels aren't the whole story. A good dSLR with a fine quality lens will beat out a compact camera any day, regardless of pixel counts.