To optimise your images you'll need to consider the final size your images will be used at. Photographs should be 300-350dpi at the size you are going to use them. There’s no point taking a postage stamp sized image at 300dpi and then blowing it up to a A4 size. Conversely, photographs at more than 350dpi will have no effect on the actual printed quality and will unnecessarily increase file size and
processing time.
Adobe Photoshop psd files can be used in your PDF file, but you will need to save the PDF as a version 1.4 PDF or later. If you are saving as a version 1.3 PDF then you will need to flatten the images when your PDF is created.