I installed the change folder icons app. It is not working at all for me. I have "enable" checked under custom icon, and then I choose Icon, nothing happens. I have restarted and resprung the springboard many times. Has any had luck with this app in iOS5?
It is working great for me! You have to enable it at two different locations: first you enable it under Global, then, you enable it for each folder and choose an icon.