You set the default general unit of measurement in your Preferences (under the Units & Display Performance category) and that becomes the unit used by every dialog and palette (except Stroke and Type). It is possible, however, to override that default simply by typing in the unit you want to use. For example, if your default is set to inches, you can create a rectangle that's 40 points wide by clicking once with the Rectangle tool (M) on the artboard and then typing "40 pt" in the dialog. Use these shortcuts: in for inches, cm for centimeters, pt for points, px for pixels, or mm for millimeters.
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