More dots means that you can get more information in that inch, so the higher the resolution, the sharper the image -- usually. Bigger is not always better. If your image is going to be small, for example, you don't need a higher resolution because the eye would not distinguish the detail anyway. And because there is more information -- more pixels -- in a higher resolution image, the resulting file is going to be considerably larger -- which isn't good if you need to download the file.
Here are some quick tips as to the type of resolution you want to scan at for three typical applications: e-mail, Web sites, and hardcopy.
E-MAIL
Ideal Resolution: 72-100dpi
When you are sending e-mail, you want to inconvenience the recipient as little as possible. Since nobody likes getting a huge file -- even if the file is a picture of your best friend's cat -- it's a good idea to minimize the size of the file as much as possible. Keep in mind also that most e-mail images are viewed on a monitor rather than printed out -- and that the resolution for something viewed on a display should be much lower than something printed. Finally, saving it as a JPEG (.JPG) file will mean that the file will be further compressed.
WEB SITES
Ideal Resolution: Approximately 100 dpi
As with e-mail, Web images need to be reasonably small in order to work. For one thing, you don't want visitors to your site to have to sit and twiddle their thumbs while waiting for your images to download. You also have to take into consideration the size of the screen that your visitors will be looking at -- a larger image (demanding a higher resolution) might look good on somebody who views the Web using 1024x768 resolution on their monitor, but if they are watching it using 800x600 (or, more rarely, 640x480), your image may be too large for the display.
DESKTOP/PHOTO PRINTERS
Ideal Resolution: 100 dpi and above
If you've decided to print out your image, then the resolution you use will depend more on what you want to use it for than on the medium itself. The higher the resolution, the sharper and truer your image -- but remember, there are a lot of other factors that come into play, including the quality of your printer (and the resolutions that it is capable of), and of the paper you are printing on.
