Q:

What does scale in the graphicx package actually do? 

I ran into the following curiosity while using the graphicx package.  When including two images of the same size, I scaled them using the same ratio (see example below).  However the images didn't come out the same size.  Does this have something to do with pixel density? 
Here is a MWE:
\documentclass{article}
\usepackage{graphicx}

\begin{document}
    \includegraphics[scale=0.25]{ModularComponents0.png}  
    \includegraphics[scale=0.25]{ModularComponents1.png}
\end{document}

Here are the two images: 
and finally here is the screen shot of the MWE:

A:

The one image is saved as 96 ppi, the other as 72 ppi.  They have the same pixel dimensions (which is what your browser uses as seen above) but they aren't the same size, as in nominal area on paper, i.e. dimensions in mm/inch/whatever (which is what TeX uses).  You can fix this with gimp or something like that.  Or you use width or height instead of scale.  scale has nothing to do with it by the way.  If you omit it in your MWE, the size difference persists.