Help with Customizing Icons

I have got a folder where screencasts from Snapz Pro X are saved to (prevent them cluttering my desktop) , this is also a stack on my dock.

I have been trying to change the default blue "recycled" looking folder with one with the Snapz Pro X icon on it which I edited with the image editing app Pixelmator.

I also installed Apple's Icon Composer to take my final PNG and export it into a Apple Icon Image file (.icns) at a glorious 512x512.

However when I change the icon (by pasting the new icon file onto the top left of the folder's Get Info dialog), I simply get a generic image icon instead.

I tried searching around on the forums. Others get the same problem, but no one appears to have a solution.

Does anyone know what to do?

Thanks very much