Resolution describes the level of detail present in a digital format. High resolution images and devices are generally considered more visually pleasing because the pixels are not visible. The actual pixels are visible in low resolution images and devices, resulting in blocky edges and a "pixelated" visual quality.
Resolution can be defined in PPI or DPI. PPI refers to "pixels per inch" and DPI refers to "dots per inch." PPI is a measurement of how many pixels are present within a given inch of a digital device or image. DPI is a measurement of how many printed dots are present within a given inch of a printed image. The primary difference is that PPI refers to digital information and DPI refers to analog (i.e. printed) information. Since the concept is very similar, PPI and DPI are often used interchangeably.
An image that is 100 ppi means that there are one hundred pixels in each inch of the image while 300 ppi means that there are 300 pixels in each inch. Obviously, the pixels of a 300ppi image are much smaller than the pixels of a 100ppi image.
See also: Pixel