This still affect 64bit Windows. Windows 8 and now 8.1 in my case.
The live folder icon are stored in the "imageres.dll" file.
The funny way that Windows works, this file is located in three separate folders:
The exact folder name of the last might be peculiar to my system, I can't say for sure. Since updating to Windows 8.1, the WinSxS folder is empty.
These folders are system folders and to alter the imageres file requires taking ownership of the files, editing them in a resource editor, saving and rebuilding the icon cache. This is not as easy as it sounds. Windows tends to resist alterations to these files. I've managed to edit and commit the changes to all three, once, and got live folders working exactly as it works on my Win7 32bit system; properly. After being forced to perform a system file check using SFC, some instances of live folders reverted to Windows default. I haven't been able to repeat the process to reinstate.
This is too much to ask of the average user to try and do. I hope that Stardock can finally get around to updating IconPackager. The current version predates Windows 8.
Since updating to Windows 8.1, MS has added more icons than IconPackager can handle. I'm referring to icons displayed in File Explorer in the My PC view. The drives are skinned, but the new group "Folders" shows default icons. Same goes for Network locations.
IconPackager is essential to the Stardock skinning experience. It's time its had a thorough overhaul.