I am often asked about DPI, so here is a mini primer…
DPI stands for Dots Per Inch. It refers to the number of dots that exist within an inch square of an image. The more dots, the clearer the image. You can always subtract the number of dots, but not make up new ones that don’t exist which is why you can make a 300 dpi file into a 72dpi file, but not the other way around. So if you send your designer a low res file, they will not be able to make a large sign out of it because the image will not be crisp since those extra dots simply do not exist.
There are some differing thoughts as to the optimal number of dots for various projects, but a pretty general rule of thumb is 300dpi for print (although some swear by numbers as high as 600), around 150 for a projected presentation, and no lower than 72 for web images (96 is also popular).
Final thing to know, the larger the dpi, the bigger the file size. If you have a 300dpi image, you do want to make it smaller if you’re using it for web purposes or it will load slowly.
Hopefully this clears up some of the mysteries of dpi.