Assume I have an \"images\" folder directory under the root of my application. How can I, from within a .css file, reference an image in this directory using an ASP.NET app
Put your dynamic CSS in a user control in an .ascx file and then you do not need to run all your css files through the asp.net page processer.
<%@ Control %>
But the easiest way to solve the ~ problem is to not use a ~ at all. In Visual Studio, in Solution Explorer, right click your application, select Properties Window and change the Virtual Path to /.