Add Folder Icons uses the images contained in a folder to generate a custom icon and assign it to the folder. The rules for creating such icons follow a customizable preset that can alter the images in several ways, mostly designed to make the folders more closely resemble the analog source of their contents.
By default, Add Folder Icons uses the first four images in the selected folder, when ordered alphabetically, to generate and assign a new folder icon containing the images represented by Polaroid-style photos; if there are fewer than four images, then it uses all that are available. There are two other presets that I couldn't get working (they may have something to do with the application SlipCover - now apparently discontinued), but Add Folder Icons affords the ability to create custom rules for icon generation, with a number of different ways of using the images contained.
Sam's Protip: An excessive variety of icons forces modern versions of OS X to display some as pixellated messes, so use restraint in your icon customization.
Customize the appearance of the system by changing the original icons.
Small application to create CS5 and Web 2.0 style icons.
Used to automatically populate folder icons with the artwork contained in a folders audio files.
Create custom folder icons and custom file icons on your Mac.
This app allows you to apply a single custom icon to any number of files.