The advertised resolution of these consumer scanners is almost absurd given none have been tested to get much higher than 1800-2400 actual dpi. There's a reason that high end shops use $50,000 drum scanners. Looking at sample shots from the Canon shows it can't resolve film grain.
As a former drum scanner operator, I can tell you that drums have long since been largely left behind with the advent of better, faster and less problem-prone flatbeds.
That said, not all flatbeds are created equal. As with most things, you get what you pay for, and technology has marched a long way in this area in the past decade.
In any case, the OP should test a few resolution settings first and see where diminishing returns set in, and he'll likely find 600dpi more than adequate.
For the most part, I agree with this, absolutely test. For full testing, scan at various resolutions, blow up 400% or 800% and print cropped areas of high detail. See what your limits are, and adjust scanning accordingly.
Beyond that he'll just see a lot of 'mush' because the gelatin coating on the paper will diffuse the scanner light source. Only glossy photos can deliver much resolution beyond 1000dpi.
While I agree you probably won't see much beyond 1000 dpi, the reasoning is pure silliness.
For this reason I learned to simply use my dSLR to take pictures of old photos because you can arrange your light source in such a way to not exagerate the paper texture like a scanner will.
This is where I really fall off the train. If you're suggesting using your dSLR will yield better results than a scanner, you've either got a) a WAY better dSLR than I've ever seen, or b) a SUPER crappy scanner (or just don't know how to use it).
Also, while smoother substrates scan better, photos of this age will probably not be printed on textured stock.
Finally:
a lot of the extra dpi does nothing to improve the scanned image.
This, totally. The absolute best you can hope for is for your scanner to be able to resolve film grain, and if the original isn't sharp, your final won't be.
For your dropdown questions - where are you seeing the 1200 dpi limit? Are you scanning in greyscale (or some other mode) that limits it?
I was going to check the manual, but it's some wacky installed application rather than a PDF.