It will work for images embedded in PostScript, and resample them to different DPI if you ask (I think probably more for on-screen viewing and file size reasons

It will work for images embedded in PostScript, and resample them to different DPI if you ask (I think probably more for on-screen viewing and file size reasons than printing). I would be kind of surprised if it does anything as sophisticated as "B&W or color images interspersed on the page with 1bpp text" though (i.e. analysing full page images, locating and separating text and figure regions, and choosing different encodings for each). DjVu does do some things along those lines, but it's not widely supported like PDF.