I could be wrong, since this is not really my area of expertise, but my
interpretation would be:

a scanner sensor is typically a string rather than an area - it's physical
resolution is 1600 dpi. This sensor string is moved to cover the area -
the step driver is capable of postioning at 3200 dpi.

<chuckle>  I just asked this in my reply to your reply about the V100's
resolution, where I pasted numbers for that one.  :)

The term they are using, "hardware resolution" with Micro Step means
that while the basic optical resolution is 1600, they can achieve a
sort of hybrid "super-resolution" by stepping the scan half that
distance and applying some rather old software analysis to achieve
3200.  This is a pretty good technique and better than purely software
"sharpening."

Radars do this a lot.

I see it as "specsmanship".  The pixel counts, assuming no
signal-spreading between pixels, defines the possible
resolution across the image in an image if the optics are
good enough not to limit resolution. The step interval
defines the possible vertical resolution, with a similar
proviso.  Software interpolation, by the scan software or by
image editing software, cannot actually increase resolution.
 It would require having more information about the content
of the image;where could that come from?

The true test is from a scan (or photo) of a resolution chart.