Objects aren't passed at all. By default, the argument is evaluated and its value is passed, by value, as the initial value of the parameter of the method you're calling. Now the important point is that the value is a reference for reference types - a way of getting to an object (or null). Changes to that object will be visible from the caller. However, changing the value of the parameter to refer to a different object will not be visible when you're using pass by value, which is the default for all types.
If you want to use pass-by-reference, you must use out or ref, whether the parameter type is a value type or a reference type. In that case, effectively the variable itself is passed by reference, so the parameter uses the same storage location as the argument - and changes to the parameter itself are seen by the caller.
So:
public void Foo(Image image)
{
// This change won't be seen by the caller: it's changing the value
// of the parameter.
image = Image.FromStream(...);
}
public void Foo(ref Image image)
{
// This change *will* be seen by the caller: it's changing the value
// of the parameter, but we're using pass by reference
image = Image.FromStream(...);
}
public void Foo(Image image)
{
// This change *will* be seen by the caller: it's changing the data
// within the object that the parameter value refers to.
image.RotateFlip(...);
}
I have an article which goes into a lot more detail in this. Basically, "pass by reference" doesn't mean what you think it means.