A 100 x 100 pixel bitmap (or jpeg) that represents one square inch is 100 PPI. A 200 x 200 bitmap that represents the same space is 200 PPI, and hence has more 'detail'. The image exists independently of what it will eventually be outputted (displayed on the screen or printed) at. You can then print at whatever DPI you want, or display on screen at whatever DPI you want (according to screen resolution and zoom control within a program).
There is no need to even think about DPI in this case. Just realise what XTrkCad actually means.
deltatango wrote:How do I import a train to run on the track ?
You've got me there... that's one bit of XTrkCad I've never got working. I'd be interested too if anyone has managed it