Instructions 

For the folder backgrounds to work you must edit your explorerframe.dll

Open the explorerframe.dll in the system 32 folder for both x86 and x64 in restorator or your perfered file editing program

go to the uifolder

click on it to expand

click on 40960

at the top of restorator click the rc button and then the ab button 
 
select all the text

then go to the explorerframe 40960 text note in this download 

copy all of the text and paste it over the text in the explorerframe uifile 40960

then save the dll

This will patch explorer to show background pics in folders and other places :)