In general, Pixels per Inch is for screen resolutions and Dots per Inch is for print resolutions, as lawndartcatcher says, but when you're dealing with an image that will be printed at a specific size, it is correct to use Pixels per Inch (because the image is in pixels) regardless of the number of dots per inch that the printer will lay down on the paper. (A 72 ppi image will print at 72 pixels per inch, whether the printer resolution is 300, 600 or 2800 dots per inch.)
To understand how this works in relation to a layout program like InDesign, you have to really grasp the difference between an image resolution in pixels, and an image size on paper in centimeters or inches. It is output size in inches that determines the pixels-per-inch. Image metadata contains a ppi number so you can work out how big it will be when printed at that resolution. It has almost no other use.
F8 in InDesign toggles the Info panel, and you should work with it extensively when you have images in a document.
The Info panel shows two resolution numbers for an image, both in ppi for the reason I gave in the first paragraph. The first number, called "Actual ppi," is the ppi recorded in the metadata for that image. This is commonly 72 ppi for images you'll find on the web and from small digicams, 240 ppi for images from DSLR cameras, etc.. This is an "information only" number, and of no practical importance in a layout. I really wish they had left it out, because it serves no useful purpose and (as in this case) simply confuses the issue.
The number you have to pay attention to is the "Effective ppi," because that directly affects print quality. An image that is 600x600 pixels, placed as a 2 inch square image, has an effective resolution of 300 ppi, regardless of what the metadata says. That same image placed as a 6-inch square has an effective resolution of 100 ppi. A 300 ppi (in metadata) image may be only 50 ppi when placed in the document at the print size specified. Similarly, a 72 ppi image may be 450 ppi at the size it has been given in the document. You get the idea.
If the effective resolution of an image on export is less than the target ppi (usually 300, but not always), InDesign will not upsample the image. If it's 72 ppi effective in the InDesign document, it will be 72 ppi effective in the PDF. And yes, that will look pretty bad when it's printed.
If you have an 4 inch x 4 inch (10cm x 10cm) image that says it is 72 ppi (i.e., it's 288 pixels wide and tall), you can place that in InDesign at 1 inch (2.5 cm) square and you'll be fine. But you can't make it 10 cm square and expect it to look good in print.
