well...i know photoshop. and i know illustrator pretty well, since i did take a viscom class in school for 3 years.
photoshop is good, mainly for image editing. illustrator is good for text and page layouts... and it woks with vector images instead of raster. if you dont know what that is, if you look at a raster image at 300x zoom, there will be no pixles visible.. so if you type, say, the letter "G" and zoom in on a curved part, it will be a perfectly smooth curve no matter the size of the text.. if you did it in photoshop, it would look choppy and pixely.
anyway, do all of your photo editing in photoshop, and import it into illustrator and THEN add the text and make the page layout.
as for your DPI, or PPI, (pixels per inch) the higher quality the photo, the more ppi it will be. if you were wonderig how to change it, you can go into
image>image size and the last box will be your resolution in PPI. if you need it in 300 ppi, you can change the imahe to that size, save it as a .gif, since it will maintain its quality. and then import it into illustrator, where you can then add all of your txt. from there, design your page layouts and print.
i hope that made sense to you.
lol i tried to word it as best as i could.
HTH!