Back in the IE4 days, if you installed the Windows Desktop Update for Windows 95 or happened to be using Windows 98, you could customize folders on your computer to your heart's content using a built-in folder customization wizard (IEShWiz.exe). It allowed users to assign a background image to the folder, add an InfoTip (tooltip) for that folder or apply an HTML based template, with an HTT (Hypertext template) extension. Windows 2000 went a step ahead in allowing the degree of customization. The HTT feature was abused by malware. The "Web View" which displayed the output of these customizations wasn't exactly performant either.
Therefore, the "Web view" and HTT customization features were dropped in Windows XP but their removal was justified. So Microsoft removed the wizard altogether and thankfully replaced it somewhat with a Customize tab in the folder's Properties which allows customizing the folder's view, icon and thumbnail view. Fortunately, the customization capabilities offered by desktop.ini since IE4 were left infact, which means you could create a hand edited desktop.ini to change the folder background or add an infotip among dozens of other customizations or copy over IEShWiz.exe from an older version of Windows to the folder you wanted to customize and run it.
Ave's Vista Folder Background. This is a shell extension which adds a nice Property Sheet to the folder's properties à la Windows XP's Customize tab. Windows 7 apparently comes with a new ListView control for Explorer which (I presume) breaks all such methods and so now the folder background customization feature is gone till someone writes a background customization shell extension specifically for Windows 7 (which anyone hardly does today, they are all up there twittering except a few) .
Desktop.ini now serves other annoying purposes such as appearing on the desktop when hidden and system files are set to show.