If this is irony and I'm not getting it I'm sorry, but what do you mean by "trying the shell extension"?
Apart from the "Browse with XnView" functionality there's no functionality regarding folders I know of. The Shell Extension displays for image files and I use it a lot but I was referring to what displays when you right-click on a folder.
No, sorry, I meant "Use Shell Extension" option, but you are right, it's unavailable for the folders - but - perhaps it would be a nice option, display 4 thumbnails if there are images inside the folder.
Browse with XnView context menu is not actually a shell-extension, it's a simple shell shortcut menu and this his kind of menu item doesn't support icons.
Writing a new shell-extension would be reguired to get the icon on that menu item.