Ok, i found two articles that seem to attempt handling the above.  here they are, 
they might or might not be useful:

[lnk]http://www.annoyances.org/exec/show/article03-203[/lnk]

[lnk]http://support.microsoft.com/default.aspx?kbid=812003[/lnk]

...and now here's what i did that seems to work:

1.  open the folder whose picture you want to change.

2.  put all of the image files within that folder into another folder (sub-categorize 
it).

3.  now, go back to the original folder and right-click properties>customize>what 
type of folder? select documents.  you can leave the box unchecked.

4.  select choose picture and select any random picture.  hit ok.  you should now 
see THAT picture appear on your folder.

5.  now to make it appear as your regular icon in thumbnail view go back and select 
restore default.  you should now see the picture split into four folder pictures. 
 HOWEVER, when you hit OK you will see your folder icon magically appear as the picture!

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