Version: (using KDE 4.3.1) OS: Linux Installed from: Ubuntu Packages Make a new directory, and give it a custom icon. The directory icon is replaced in Dolphin and Konqueror. Put e.g. a JPEG file in the directory. If "View -> Preview" is selected the tiny JPEG thumbnail is shown instead of the icon. This seems incorrect -- if a custom icon is set it should be used in preference to the preview.
Thanks for the bug report! This sounds pretty much like an issue that has been reported already. *** This bug has been marked as a duplicate of bug 201850 ***