Resolution in digital camera terms actually refers to the number of pixels that form the image of the photos that were taken. The more the number of pixels that form an image, the sharper and clearer the image will be.
In fact, the term Megapixels simply refer to millions of pixels. One Megapixel is the equivalent of one million pixels. The higher the Megapixels of the camera specification, the better the image quality.
You probably may not know it, but you can actually set the camera to shoot at a camera resolution of your choice. You can choose it when deciding on the file size of the photos that you want to take. If you set your camera to take smaller file sized photos, it actually takes pictures of a lower resolution. This is useful especially when you need to take plenty of photos and you’re low on memory storage. It might lower the quality of your images, but you don’t really need every image to be 10 megapixels or more.
Photo resolution is important not only in determining file size, but also important in determining the print quality of your photos. The size of your photos translates to pixels readily through simple multiplication. For example, a photo size 8 inches by 10 inches and 2 megapixels essentially mean that there are 2 million pixels on an area of 80 square inches, or approximately 160 dots/pixel per inch, also known as dpi. High quality pictures normally go only about as high as 300 dpi, which means 10 megapixels for a 8 x 10 inch photo, which is about 350 dpi, is overkill.
But of course, picture resolution isn't the only factor in photo and print quality. Other factors like photo lighting, steadiness while taking the picture, printers and printing paper also affect the end result of your photos.
Again, your pattern of camera use will help you determine what you should buy for a mini digital camera. If you’re a person who wants to make large photo prints very frequently, then of course a high resolution camera is a must for you. But if you’re more interested in taking lots of pictures and uploading web quality versions, you don’t actually have to pay extra money for higher resolution models, only to resize them into smaller files for uploading.