This was an interview question. Given Visual Studio 2008 and an icon saved as a .PNG file, they required the image as an embedded resource and to be used as the icon within
Icon.FromHandle will cause problems with a PNG, because PNGs have more than one bit of transparency. This type of issue can be solved with a library like IconLib.
Chances are they didn't know how to do it and they were trying to squeeze the answer out of potential employees. Furthermore, setting the icon of the form from a PNG is an unnecessary performance hit, it should have been an ICO in the first place.