Live Icons show actual file contents.
Key components of the new Windows Vista Explorers, Live Icons display a thumbnail image of the actual contents of every file, making it easier to select a given item.
Scalable "live" icons in premium versions of Windows Vista greatly improve on generic system icons. Programs that have this feature show thumbnail previews of the actual content of a file, rather than a simple, generic representation of the application associated with that file. You can see rich previews of your files—including the first pages of your documents, your photos, or even album art for your songs—without opening them. This helps you work more efficiently and productively.
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