You'll have bigger problems when you change the AutoScaleMode property. Increasing the DPI also changes the system font size. Necessarily so, font sizes are expressed in points, 1/72 inch. The fonts need to be bigger to get the same point size when the DPI increases and keep the text just as readable when viewed from the same distance.
Since the controls don't get resized anymore, the text on, say, a button no longer fits. One way to battle this is to change the font size on the controls proportionally. Easy if you let all the controls inherit the form font, just changing the form's Font property automatically updates the controls as well. The clear disadvantage is that the user will have a harder time reading the text. This especially gets bad when the DPI goes to 150 dots per inch and beyond, your UI just turns into an unusable postage stamp.
Yes, background images need to get scaled to fit the larger control or form. A pixel in the image now no longer maps one-to-one to a pixel of the monitor. The default Graphics.InterpolationMode value does a fairly decent job of filtering the image. But it depends on the kind of image how well that turns out. A photo almost always scales very well. Finely detailed line art and text does not. Picking the right kind of image goes a long way to avoiding having to create separate ones.
This problem isn't going to go away until monitors start to have the kind of resolution a printer has. We're still a long way from 600 dpi for desktop monitors. Phones will be first.
