The resolution does not really have much meaning since it will be a matter of how the user will print. If it is only for yourself, just go with the size. The resolution of 300 is usually in ppi (using Inches as unit) while the 118 is based on cm units. It is the same thing. So if you are using a fairly recent version of PSP, the default resolution is 300ppi (or 118 ppcm) so a 500 pixels flair will be between 1.5 and 2 inches in diameter.
