It depends on the quality of the negatives.
If they were shot using good glass, then you could get away with a smaller resolution.
If not or you're not sure, go for the highest resolution your hardware supports, although for smaller prints, it doesn't make much sense to go above 2400 dpi.
If the camera/lens was of the cheap kind, you probably want to use a resolution that'll give you an image of about 10-12 megapixels.
You can sharpen it and shrink it afterwards. It's what I do, basically.