It uses pixels, but I'm sure you're wondering how to use dips instead. The answer is in TypedValue.applyDimension(). Here's an example of how to convert dips to px in code:

// Converts 14 dip into its equivalent px
Resources r = getResources();
int px = Math.round(TypedValue.applyDimension(
    TypedValue.COMPLEX_UNIT_DIP, 14,r.getDisplayMetrics()));

The correct way to obtain a constant number of DIPs in code is to create a resources XML file containing dp values a bit like:

<?xml version="1.0" encoding="utf-8"?>
<resources>
    <dimen name="image_width">100dp</dimen>
    <dimen name="image_height">75dp</dimen>
</resources>

Then refer to the resource in your code like so:

float width = getResources().getDimension(R.dimen.image_width));
float height = getResources().getDimension(R.dimen.image_height));

The float you have returned will be scaled accordingly for the pixel density of the device and so you don't need to keep replicating a conversion method throughout your application.