Hi tedpainter, and welcome to the forum.
ArtRage imports JPG, BMP and PNG as single layered documents. It can also import Photoshop PSD layered documents, keeping all the layers, blend modes and layer opacities intact.
ArtRage also can export JPG, BMP and PNG as flattened documents (with all the lighting and bump rendered into the flattened document) or export a fully layered Photoshop PSD with layer blend modes, opacity, etc.
Note that ArtRage does require its project files to be stored in a proprietry format because there is data required for painting that can't be stored in a 'standard' format. As well as colour, ArtRage documents store the depth of paint on the canvas, whether paint is wet or dry and the surface properties of the paint. Paper textures are also stored, as well as much other information that needs to be stored with the painting.
The native DPI of ArtRage is indeed 72 DPI, however you can certainly create images much larger than just screen resolution. The ArtRage canvas has high quality super-sampled canvas zooming (as well as panning and rotation) so you can work on documents with much larger resolutions than screen resolution, scaled to a comfortable size and orientation on your monitor with no loss of quality.
There are some limitations with the free version of ArtRage, but it can still support imported flat PSDs, so you can indeed make a document in Photoshop if you need to get exact inch or centimeter sizing and can't do the DPI conversion yourself.
ArtRage has been and continues to be very successful - not just because it does integrate well with other applications, but also because it does what it does well in a way that inspires creativity and experimentation.
AndyRage's mantra for graphics engine code:
"Sure - how hard can it be?"