300 DPI is the "reasonable" limit for standard commercial printing.
300 DPI, is also the practical limit for "standard" printer paper. Higher resolution tends to wet the paper too much, and can result in a blurry image.
As to digital photography, there are many variables to consider.
Even the best photo printers do not produce true 1200 DPI images unless you are using high quality photo paper.
I have progressed from a 640*480 to a 1.2MPixel digital camera.
My next camera will be at least a 4MPixel.
Beyond raw resolution, the next most important item to consider is the quality of the optics on the camera.
For a given resolution, the better the optics, the better the picture.
The major reason for higher resolution cameras and scanners is to allow you to enlarge an image.
if you have a 600 DPI image, and enlarge it by 10X, you now have a 60 DPI image.
Chas