After much problems, I realized that most of my problems with not showing icons changed with iconpackager is that vista is extremely picky about icons. When you browse for icons, you can see the icon displayed correctly as thumbnail, but when you apply it, you will either see nothing, or smaller framed version of the icon. this is when there is no 256x256 version of the icon. (even if you want to display only 128x128!). IconDeveloper is particularly good in saving incorrect icons, some he saves only as 255x255 which is of course incorrect. Because of that, I switched to some other commercial iconeditor, but it costs!

but there is a even a bug in iconpackager that for some icons, it will seemingly change them, but vista will override the setting by some other icon, as for example
\users\myself\Documents - i can see in iconpackager change icon dialog that he thinks he has correct icon, but vista is showing me different icon...

and i also noticed that for some special folders, the changes will take place only after restart/relogon...

are these reported/known bugs?