New libraries introduced in Windows 7, help you to organize folders into categories without necessary moving the folder into one place. That’s nice, and its even nicer you can create your own "library". But one thing you can’t do is the ability to change the display icon looks in the library.

Here is an easy way to change the Library Icon.

All you need to do is download this little utility that will enable you to do so.

All you need to do is:

1. select the Libraries that you want to change on the right side

2. select the icon that you want on the right

3. Click "select icon from dll"

with this tool you can also choose the icon that aren’t from this dll, you can also replace any icon that you have as long as its in .ico format.

The old way

require editing a small XML file, that you need to add/change the icon reference path.

1. create a new empty text file

2. navigate to C:\Users\[USERNAME]\AppData\Roaming\Microsoft\Windows\Libraries

drag and drop the icon into the notepad, and change the highlighted iconRefernece

you can change the number -1005 to something else like 1004 (you should see the difference right away)

or copy a path of your existing icon. It can be anywhere in your system, as long as you specify the location.

Here is the after.

Source Thanks Howtogeek and Liferocks 2.0 for providing those info