We have posted a tutorial about settings your desired wallpaper as background image in any folder:
How to Set Your Desired Wallpaper as Folder Background Image in Windows XP
But this method no longer works in Windows Vista and 7. So today we are going to share a small utility which allows you to set any wallpaper as background image in folders in Windows Vista and 7.
Thanks to Andreas for creating "Vista Folder Background". It integrates itself in Explorer and adds a new tab "Folder Background" in Folder Customization dialog box.

This article was posted by VG in following section: Software, Windows 7, Windows Vista.
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VG
^^ I tried with both JPG and BMP files. Both worked. May you don't have proper permissions?
Ronnell
got it install but it won't change the default green picture folder
Ronald
I will try again with the permissions since every time you tell some one that it fixes the problem I clicked on the Microsoft MVP link and saw you were having a discussion sometime this month. Is that a Microsft Insider thing or can anyone attend? I wouldn't interrupt, just listen.
Ronald
could you believe i had unselected display folder background in my performance advanced settings menu thanks again Vishal sir this will increase my love for windows 10X so it is up around 10^100
VG
^^ Good to know. Regarding to your MVP page question, Its Global Summit for MVPs which is organized every year. :)
Ronald
bet it will be full of conspiracies and jokes about steve jobs. guess i'll delete it from my calendar then *sniff*
Ronnell
do you think it will chage default folders that are green and not brown in vista?
VG
^^ It changes folder's background. It doesnt change their icons. :)
Ronald
Dear Ronnell,
are you asking if the folders that are default vista glass ( transparent) and the normal windows files (that are similar to real life manilla folders) will be changed. What this is going to do is when you open one of these folders the background of the window with the folder's content will change. The folder icon will remain the same. Your "Music" folder is transparent blue but if you open the file and right click on it's background, that is what will change, not the thumbnail placed in the icon. Does that help. Also make sure that you right click on MyComputer\ then click on \Properties(in the drop down menu \then click on (the left upper) advanced system settings\ then click on the performance settings button\ then scroll down to find "use a background image for each folder type" make sure it is checked. that was my problem. good luck
Ronnell
Thanks I have vista home premium, and the desktop,music, picture, video, document, favorites, links are all (transparent blue) mine are green, but I tried to change with a imagine jpg and click apply and refresh but still nothing, the folder is still the same.