DPI only comes into play when you want to print them. The DPI assigned by the camera is just a number. It has nothing to do with the resolution your camera shoots in. It would give you the exact same image if set it to 10 or 1000 DPI.

If you absolutely want/need to print your photo at 300DPI, then yes, 11x7 inch is all you get (that's about letter/A4 size right? I'm in the metric system). You can pretty much print at 200DPI with really noticing. 150 DPI will usually do fine. Remember that when you make a big print you're usually not going to look at it very close up. Check out some posters around town close up and you'll see they're not quite that sharp and you can count the dots.

In the end it all comes down on viewing distance. The closer people are going to be when viewing your picture, the higher your DPI is going to be. Noone is going to view a photo blown up to 9 square feet from 3 feet away.... usually.

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