Tech News Today: How to Customize Windows Folder Icons - Instantly. http://google.com/newsstand/s/CBIw6JqV-yc
Note and easy way to make an icon (.ico), is to follow these steps:
1. Open and image in MS Paint.
2. Resize the image to say 64x64 pixels.
3. Go to "File", " Save as".
4. Change the filename and select file type BMP
5. Change the ".BMP" to ".ico" and press save.
That is it you now have an icon file.