I'm having the same problem as vista-guy (Original post here) and I'm using IP v5.00.021
and Win7 x64. I'm sorry for the double post but I thought I'd get more attention here. Like
vista-guy said, the live folders appear correctly in the IP preview screen but not in explorer.
Please look at the following pictures (Flash Live IconPackage):
Preview in IP:

As seen in Explorer:

In the above pic, "CursorFX", "DesktopX" and "IconPackager" folders have only folders inside
them, not documents. Therefore, Windows decides to use the "Work" live folder icon (the fourth
icon in the first image). The problem is the "Front" icon for Live Folders is also applied when it
shouldn't be.
Now there are three possible solutions that I can think of:
- One is for IconPackager to make sure that the "Front" icon is not applied to "Work" live folders. However, this may not be possible if it's the way Windows works.
- The second is to edit the "Work" icon from the icon package folder and offset the icon somewhat to the left so that it overlaps with the "Front" icon. Again, this may not be possible on all packages since the "Work" icon may not be similar to the "Front" icon as is the case with the "Flash Live" package in the screenshots. Still, I was able to do this on "Diamond" and a couple other packages.
- The third solution is for icon package developers to make sure that their "Work" icons overlap properly with the "Front" icon. For example, packages like "Quest" and "Think Green" don't have this live folder problem.
I'd really appreciate it if someone can enlighten me on this. Thanks!