See this UserStyle for the basic code that is needed. You will need to use that code for every folder you want to customize.
http://userstyles.org/styles/34038 - hit the Show Code to see the code

Add code to userChrome.css below the @namespace line.
Substitute the Folder_Name with the real folder name(s) (case sensitive).
Place the folder icons in the chrome folder where userChrome.css resides.

@namespace url("http://www.mozilla.org/keymaster/gatekeeper/there.is.only.xul"); /* only needed once */

#personal-bookmarks .bookmark-item[container][label="Folder_Name"] {
 list-style-image:url('folder-icon.png') !important;
 -moz-image-region:auto !important;
}

#personal-bookmarks toolbarbutton.bookmark-item[container] > .toolbarbutton-text {
 display:none !important;
}

See http://kb.mozillazine.org/Editing_configuration#How_to_edit_configuration_files

Thanks for the quick replies. Unfortunately I'm new to Firefox and don't know what to do with the info that you kindly provided. Find myself clicking from link to link getting more confused as I go along. In IE I simply right click on the Folder/Options/Change Icon.

I really just want to use a browser without spending a whole lot of time learning new tricks.

I am having this problem as well. I have folders on my tool bar that I would love to give icons to so that I can distinguish between them more easily.

Is there a plugin developed for this yet? If not, can someone shoot a video on it??

Thanks,

John