Myth No 1 (CMYK mode is best for all methods of printing)
You don't need to use CMYK mode to print stuff at Costco, or Officemax. CMYK images are only required for outputting separations for print jobs that are printed with traditional printing methods such as offset lithography, where separations are required to make the printing plates. Digital printing does not require separations and doesn't use printing plates. Sure you can use the CMYK preview in Photoshop to preview what your image would look like when printed, but there's no need to actually convert it to CMYK. Plus CMYK images have larger files sizes than corresponding RGB files.
Myth No 2 (JPEGs are low quality, uncompressed formats are best)
Consumer photo printing labs (such as Costco and Officemax) are geared up to expect people to send them 8 bit RGB jpegs. That's what you need. Just make sure you save it at the maximum quality settings. You won't see any difference in quality with a jpeg output at the maximum quality settings. You won't see any difference when using a magnifying glass to examine the print either.
Do not try to send them a flattened PSD - PSDs are uncompressed, that's why the file size is huge!!! Or a TIFF - similarly the file size will be huge.
Myth No 3 (more pixels for large prints are always better)
If you set the image size to 16 x 20 inch and then set the ppi at 300 per cm, then your image is about three times the size it needs to be. Set the PPI to something like 200 pixels per INCH!!! - it'll be absolutely fine for a poster. Posters can be printed at lower resolution because the normal viewing distance is further.
16" x 20" @ 200PPI = 3200px x 4000px <=== that's the size of image you need
or if you want the maximum print quality then 300PPI (that's Pixels per Inch - not per centimetre!!!)
16" x 20" @ 300PPI = 4800px x 6000px - anything more than that is a waste of pixels.
Myth No 4 (Photoshop is great for making posters!!! and everything!!!)
Photoshop is great for outputting raster images and editing them. However if there is text on the poster, Photoshop can only produce rasterized text, which will look crap when printed. Do the poster layout in Adobe Illustrator or Adobe InDesign instead - and add any text at that stage. Sure use Photoshop for the main image, but you want to have the text as outlines for the best/sharpest result - and Photoshop can't do that!!!