if you're going to be doing work in photoshop - watermark background for example - you'll want to export the artwork at a high dpi. 300 dpi is the standard rough number. i had a power point lesson 2 years ago that had some kind of formula for determing a rough optimial dpi based on the kind of paper you were using and the type of printer (laser, injet, bubble etc) but i really think it was optimal for home printing and not commercial printing. i've always done mine at 300 and they've come out nicely.

what i find best for setting up print documents is to turn image resampling off. when you start up a 300 dpi document it doesn't resize the canvase to compensate for the dpi which means your ram won't be sucked right out. this doesn't really apply to identity documents more full graphics but sometimes i work in rgb and switch over to cmyk at the end - ps only has to juggle 3 colour ranges instead of 4, so less ram whoring.

ideally you should set these up in illustrator. i always import my ai files into indesign when i set up the templates. another thing to note is bleed. if you're going to do a full bleed add 1/8 around the outside of the canvase - letterhead would be 8 5/8 x 11 1/8.

i don't do too much print work, but i understand it enough to make due when i want/need some, so ask away if you have any other questions, i'll try to answer them.