Windows looks at the resolution and screen size. From there it adjust the DPI of Windows.
High DPI allows you to enjoy smoother text, richer and nicer looking icons, more details can be convey to you. You can also view larger pictures which your cameras take without scroll bars (or reduce), again allowing you to view more details.
It is exactly like your smart phone. High resolution on a small display, makes text easier to read, and everything is nicer looking.
Now, while all this is nice and neat, there is a small problem. You see Modern UI apps in Windows 8, the entire infrastructure, was made to allow all software to be high-DPI aware, and have the ability to change DPI on the fly. Sadly, desktop applications dates back from an area of when the concept 'high-DPI' didn't exists. The idea of driving super high resolution (compared at the time), normal to us now, on a small display, was just not taught about. Therefore, desktop application shell infrastructure that Windows desktop application uses, aren't high-DPI aware.
Microsoft can't change that, because it will break compatibility, and everyone will complain how few or no current software works with the new Windows. But that doesn't mean that Microsoft isn't trying.
Since XP, Microsoft has implement and improved on every version of Windows DPI scaling on desktop applications. Developers has tools to make their applications on the desktop high-DPI aware.
The problem, is that the great majority of software on the desktop, aren't high DPI aware. It has to do with priority. Only a small percentage of users uses high-DPI aware application. How many people have Surface Pro's, laptops with a high-resolutions display, and how many have a 4K 24inch screen? Not many. And sadly, for us, it isn't a few lines of code to add. For some programs it is a mater of changing the entire GUI framework that they built, or worst, some are dependent on GUI framework that don't support high-DPI aware. So, it is a lot of work, to provide support.
Also, many developers don't see it as a selling point. Meaning they don't see that spending huge amount of hours forming potentially months of work, to make their software high-DPI aware, will its make consumer go "Oh! Nice! I need to buy the new version for this feature". So, they just way until it becomes one, or the market share shows that it is a necessity for their software to support.
Desktop program that aren't high-DPI aware, Windows can only do one things: Scale it big like an image. So the result, is that the application turns blurry.
Another problem, is that desktop applications don't support dynamic high-DPI scaling. Meaning, if you change the DPI, Windows will EMULATE the DPI by scaling or shrinking things, making even a high-DPI aware application blurry. But you really need to restart your system to apply the settings properly. A note: I believe Microsoft added something under Windows 8.x to allow software to support dynamic scaling, but I am not sure.
So in your case:
-> Restart your system, and less things will be blurry
-> Expect that Windows and Microsoft software (like Office, Visual Studio, etc.) to be high DPI aware in their latest version, but the rest, not to much, and be blurry. Heck, even Device Manager in Windows is not high-DPI aware. Hopefully that will be changed in Windows 10.
To not have Windows scale things large (ie: increase the DPI of Windows, and leaving it as default), check your Display setting panel in Windows, as Tosko pointed out.
THANKS!
