is it advisable to play with the controls to make my form look like this or should i just use this graphic and place it in the background. if the former, then please suggest which controls on the form i can tweak to make the form look like this?
alt text http://img10.imageshack.us/img10/2351/huesaturation.jpg
To create something like this, I would suggest moving from winforms to Windows Presentation Foundation (WPF) if you have the option. There is much better support for creating these type of rich interfaces in WPF, although it does mean introducing a .NET 3.0+ requirement to your application.
To get you started, here are some tutorials:
http://dotnetslackers.com/articles/silverlight/WPFTutorial.aspx
http://msdn.microsoft.com/en-us/library/ms752299.aspx