Using WinXP, SP2 and IP3 3.00d[b].002 (the most recent verison)
When applying packages drive icons and ordinary (i.e. not "special") folder icons do not apply correctly. Specifically the default XP icons are applied instead. This happens with all the current icon packages that I have. Using "Rebuild Icon Cache", "Repair Icon Images", Restarting and Re-appling the package does not fix this problem.
I was kind of hoping that what ever was wrong with IP3 would be sorted out. Maybe not. Bring back IP 2.5
Edit: To Clarify: If I use the My Computer icon on my desktop (which I normally have hidden) then icons for drive and folders appear correctly (including those in subsequent subfolders from the "correct" My Computer screen. If I use any sort of shortcut (including Start Menu and Object Dock) the icons in My COmputer do not apply correctly and neither do all subsequent subfolders navigated to from this "incorrect" My Computer.
Recreating shortcuts, both mauaully and "Alt-dragging" does not fix this probelem.
Strange.