The answer to this question is dependant upon what you plan to do with the image. In this mode, color is represented in terms of amounts of Red, Green, and Blue light, conforming to color presentation on color monitors. It requires the least amount of memory of all the color modes.
Indexed color is good for line art that requires only a small handful of colors.
This is the color mode you will use if you are going to make a 'gif'. A similar approach to color is used in Monotone, Duotone, Tritone, and Quadtone modes. The later of these two settings allows for a greater subtlety of color, however, it causes file sizes to be twice as large. The answer to this question is dependant upon what you plan to do with the image. If you are creating the image to be posted on a web page, use 72 ppi.