Resolution - DPI or Dots Per Inch
Inserting images with the incorrect dpi (dots per inch) is also a common mistake which can result in project delays or jobs not meeting the customers standards. Remember that screen resolution is 72 dpi, and print resolution is 300. So while you think to yourself "this image looks great on screen" it may not look the same once printed. Grabbing images off the web to put in your print collateral is not a viable means of supplying images, and can cause issues down the road.
Images printed below 300 dpi will look grainy or pixilated. The easiest way to check whether or not your images are at print quality is to open them in Photoshop, and open the "Image Size" menu. There you will see "document size" box which will give you the dimensions and the resolution. If your file resolution is below 300, uncheck the "resample image" box (leaving the constrain porportions and scale styles boxes checked) and change the resolution to 300. The new dimensions will be the print size of your image.
Keep in mind that simply changing your dimensions to the desired size, then switching the resolution to 300 will NOT result in producing the image quality you want. Remember you can always make images smaller to improve resolution, but never make them larger.
When saving an image out of Photoshop, always use .tif files instead of .jpeg. Although producing a larger files size, tiffs are what's known as a loss-less file, and will produce the best results.
Site Updated February 2010