Scales the image content and the canvas size. The difference between "Scale Image" and Set Canvas Size is that "Set Canvas Size" will resize the canvas without scaling image content. It will only add some space around the image or crop the image.
Scale Image will scale the whole image. You can scale only the active layer with Scale Layer.
You set the new image size either by altering the size or the ratio. You can also set the resolution of the image. If you lower the resolution, the image will get bigger (in real units, but not in pixels). You therefore have to compensate it with a smaller pixel size if you still want the same image size but a lower resolution. It will naturally be vice versa if you increase the resolution. Pixel Dimension area is used to resize the pixels.