What I 've just found is this: I had win XP coloured folders using Icolor 1.42 When I installed it on Win7 it didn't work. After that I installed Rainbow Folders and the colours that I had coloured on WinXP have already been coloured on Win7. I don't know though if you have to install icolor first on win7 and then rainbow folders or use rainbow immediately.

Ok I haven't had the same problem as you. I had installed Icolor to many different xp versions and I didn't have a problem. But when I tried to install it to my cousins computer which was running windows vista the icons were disappeared too :(