The only way I can think of to make that work is try making a poster frame of whatever you want to display. So if its a DVD cover add the image to front of the movie and set it as a poster frame for the movie. Other then that I'm not sure.
Complex Technology Development
when i drag the picture to the fron of the movie it doesn't show up. neither does set poster frame work. I.e. I set a poster frame but it doesn't show up in the folder.
Related question: can normal folders also show pictures in coverflow (upon the folders)?
Select a file or folder and hit command-i (or right click and 'get info').
You get the inspector window for that file and you'll see its icon in the upper left. Then, open the info on any other file or icon that you want to use. Click the icon in the inspector and copy it (command c).
Then select the icon in the first file and paste (command v). It will over-write the icon with the new one. So you could make a folder look like iPhoto, or a Word file look like a folder.
So to recap, you're copying and pasting the icon in the "get info" windows for each file.