Ok Linda, here is my redo.....I don't see any pixelation. If I'm following you correctly not to worry about changing the dpi.....that its the pixels count to start with that really matter.....my question is what about all of the photo book sites that require a dpi of 300...won't it reflag it.? I've always changed the dpi to 300
Your photo page is already 300 dpi. Anything you add to it and eventually flatten to JPG will be 300 dpi. However, it may be interpolated pixels that the program had to add to your photos to make it 300 dpi. The photo book site does not see the pieces you used to make a big 12"x12" JPG. The site cannot tell the difference between interpolated pixels and original pixels, so it cannot warn you of pixelation.
If you upload separate photos to the photo book site's template, then YES... you would get a warning if you upload low res photos.
Make sure your PSE layout is viewed at 100% before you commit to printing. When we view our entire layout no larger than what our screen size can accommodate, it can visually hide the fact that an image on our layout is of poor quality.