You certainly do not need to be working at 300dpi at get great printing results. That's a pretty common "misconception" though, so it's understandable that you've heard it. It only matters when you are wanting to print, and even then, I'd wager that you couldn't tell the difference between 200dpi and 300dpi...
Anyhow, to answer you question, to create a perfect 300dpi 8.5" wide by 11" tall page, set your size to 2550 x 3300 pixels.
Also, we will be introducing a new upgrade to Scrapbook MAX! in April that will let you easily set page sizes according to inches and dpi (dots per inch), as well as a "zoom" feature so it will be very easy to work with such large images. It will be provided as a free download to anyone who already owns the software!
BTW - congratulations on your baby!
Scrapbook MAX! 2.0 is here!. It's simply better digital scrapbooking software!