What is 'dpi' in Photoshop for?

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What is the meaning of 'dpi' in Photoshop and what is it used for? Does it make a difference to your photos in Photoshop if you change the 'dpi'?

And also, if you are asked to create a huge billboard advertisement in Photoshop, how would you do it? Because it's sort of impossible to size your canvas in Photoshop with the actual size of the billboard. And if you make your canvas small in Photoshop, it will probably look very very blurred when enlarged to fit the billboard.

So how do you make sure that your work in Photoshop will still be in perfect quality on a huge billboard and does 'dpi' have anything to do with it?

Thanks, best answer will be given, promise! :D
 
DPI is "dots per inch" and refers, actually, to the print resolution. As for designing a billboard in Photoshop there are several things to consider. You would not design it full size, the file would be impossible to work with (and depending on your system, it could crash Photoshop). Billboards generally are intended to be viewed at a distance, so may very well be designed at a lower resolution than needed for document printing (such as a photograph). Billboards are also often designed in sections, so there are several files, carefully matched up, that become the actual image pasted or otherwise attached to the billboard.

Standard good dpi for print production is 300 dpi. A billboard, being viewed at a distance, could be much less. It would also depend on the method of printing. (You might want to research companies that produce advertising for billboards, and look at what they require in terms of resolution—dpi—file type and so on.)

Another probability for a lot of large signage is that the images are not done in Photoshop at all, but rather are done in Adobe Illustrator, which is a vector program. The big advantage of vector images is that they are resolution-independent, so you can design at a reasonable size and then scale up or down as needed without loss of quality.

But again, your best source of information would be companies that produce large images, since that's their business.
 
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