Bernard,
From what I have learned on the Blurb forums, they set their HP Indigo 5000 printers at 175 lpi, they are halftone and the paper is "coated." Thus one would use the PK halftone printer settings of 175 lpi/ 262 ppi coated, or 175 lpi/350 ppi coated, or 150 lpi/300ppi coated. I have printed a "test" book with all of these (as well as unsharpened and inkjet 300dpi/matte).
For a number of images that I use for reference, it was difficult to distinguish in the printed Blurb book among the PK settings for halftone, coated of 150/300 or 175/262, or 175/350. (Obviously, the unsharpened images looked unsharpened). For my current Blurb books I am capture sharpening prior to image editing/page design with Photoshop. I will edit/design a "full bleed page" to the exact Blurb page pixel dimensions (at 300ppi), and when finished, PK output sharpen (at halftone, 175lpi/350ppi coated), and convert to sRGB and high-quality jpeg. These are then just placed as full pages into the Blurb Booksmart page paste-up.
This is obviously more work than using the Blurb templates, but in addition to having more design freedom, the image quality is preserved. The Blurb resizing tool (e.g. to downsize a large image to fit say, a quarter-page Blurb template) really takes a toll on the printed image quality.
Happy to comment further on my experience with Blurb.
Mike Coffey
Prescott, Arizona