We say pixels are king. Never throw away pixels if you don't need to. So if you need to resize a raster layer (JPG file) make it into a Smart Object so you can down size, and return it to it's original size as often as you like, without losing quality.
I suspect that experienced Photoshop users never think in terms of linear size, as in how an images DPI relates to print size, unless they are going to print the image. Even if you intend using the image as an Internet graphic and only need it to be 1000 pixels wide, if it starts as 5000 pixels wide out of the camera, think of that as your master, and save it as such. Then downsize a copy of it to a 1000 pixels or whatever.
Amend. Any time you change the number of pixels you have for an image via any interpolation method you loose some image quality. If you reduce the number of pixels you will be discarding some details your camera captured for the image. If you increase the number of pixels you need to create details your camera did not capture. You should alway capture all the pixels your camera can a preserve them. They are the best pixels you have for the image. Unless your able to re-shoot with better settings lighting and equipement..
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