WP7 devices always have the same resolution so you shouldn't need to worry about DPI.
While devices can have different physical sizes they shouldn't differ too much. If you are really concerned you shoudl simply design and test on devices with the smallest and largest physical sizes.
If you still run into issue then it's probably due to trying to put too much on the screen. If that's the case then you should redesign the app.
One of the original design objectives for WP7 was to create a platform which did not suffer the consequences of device fragmentation such as wildly differing screen sizes and resolutions. As such there is no need to have to code for them.
NB This is the case for WP7, however WP8 supports 3 resolutions. For details on how to support WP8 see http://msdn.microsoft.com/en-us/library/windowsphone/develop/jj206974(v=vs.105).aspx