This is not just taking a section from your background.
If You Have Any Questions, Comments & Suggestions Please Post Them!
Step 1: Create the Folder
Rename it Alt + 0160 but make sure to hold down the Alt key when typing 0160 on the number pad,
This is the computer code for space, just typing in space will not work.
Step 2: Create the icon
To create the icon open up The GIMP. It can be downloaded HERE.
Now open up the layers dialog (Follow the pictures)
Delete the background layer.
Save as .ico.
Now the icon is made! You con exit Gimp.
Step 3: Set the folders or shortcut's icon
Click on the customize tab.
click the Change icon button.
Go to My Pictures.
click on the Transpanent icon.
press Ok on the propteries dialog.
the folder or shortcut is made is made.