I was very excited when I found out about your app. I rely on the label color function provided by finder, but find it very limiting as it only has five colors. But only folders in the icon view show up as colored using folderol– at least in Mountain Lion. I like to organize using the column view and the standard Mac color labeling works with that.
If you cannot see the custom folderol icons in any of the Finder views, make sure you’ve enabled icons in the Finder’s View > Show View Options (Command-J) pane. For this user, re-checking “show icons” fixed the problem.