It's a windows issue that currently is not addressed in IconPackager.

The way I personally have 'fixed' this issue is to edit any executable that contains the icon which will not change. For example, I use Firefox as my default browser and even when I change the url protocol with every other means, the icon is always the Firefox logo on the blue page.

But, I also use Vista and wanted a full regiment of icon sizes and colors available to the shell as opposed to the limited number of icons in the Firefox executable. So, I purchased Restorator 2007 and replaced the page icon with my own enhanced icon, saved the file and rebooted Vista. Now all of my urls have my own icon instead of the default Firefox icon which can not be changed easily with through the shell, regedit or IconPackager.

NOTE: I DO NOT endorse this practice and will not help anyone with how to do it. Editing executables or dlls for programs can and most likely will void any support or entitlements you have when purchasing software. Editing these files can also hinder certain programs' performance or ability to run at all. IE: When trying to edit any of Nero's filetypes with the above-mentioned procedure, you will be told by Nero's checker that you have a corrupt install because the exe/dll files have been altered.

I ONLY mention this method because I too have searched and found no other means to make crappy looking icons appear pleasant on my desktop or in my explorers and dialogs.