I have all my music tagged well and every folder includes a folder.jpg. When using WMP on my HTPC, it creates these AlbumArtSmall.jpg, which DO will show instead of folder.jpg.
How can I tell DO to prefer the folder.jpg? Changing folder-rights to avoid WMP creating these icons (mentioned in another thread from Leo) is no wanted solution.
The folders probably have a hidden+system desktop.ini file inside of them which is specifying AlbumArtSmall.jpg as their folder picture.
You can change it via the Properties dialog for the folder (Customize tab). Or by editing the desktop.ini file itself.
Hi Leo, I have no desktop.ini or other hidden files within the folders, just the 2 jpgs and the MP3s.
I absolutely despise WMP for not only littering my folders with those crappy resolution AlbumArtSmall.jpg files... but much more egregiously, overwriting carefully selected folder.jpg files of my own choosing with a lower res (and sometimes just blatantly WRONG) folder.jpg of it's own choosing.
</end_rant>
...how do you know for sure that Opus is choosing the AlbumArtSmall.jpg file? You can try just setting the Preferences / Miscellaneous / Advanced: cd_thumb_coverart_file explicitly to folder.jpg - which is what I've done myself... but even disabling that doesn't result in Opus choosing the AlbumArtSmall.jpg file instead of folder.jpg. Are you seeing a regular folder image thumbnail icon, or the CD cover overlayed with the image as the icon?
I'm sure because I have own designed, write-protected folder.jpgs (0-9, A-Z) and Albumartsmall shows always one of the MP3-covers in CD-Case. I hate that Windows/WMP changes adds things I don't want! 
I'll will try the solution you mentioned, thanks.
Opus itself doesn't know anything about AlbumArtSmall.jpg, and doesn't use that for folder thumbnails if I just create a file with that name and put it in a directory (even one full of music).
I don't know of a way to specify that a directory uses a custom JPG (i.e. not folder.jpg or coverart.jpg) for its thumbnail other than the Properties dialog's Customize tab or the cde_thumb_coverart_file setting that Steje mentioned.
Did you check the Properties dialog as well as that setting?
Leo, I was wrong, some of the original folder.jpgs weren't overwritten, so I thought it would be the albumartsmall-file. With custom I meant folder.jpg showing e.g. a CD from A-Z!
Does it make sense to rename all folder.jpg to coverart.jpg?
I would copy the folderart.jpg files to coverart.jpg, rather than move. That way programs which only look for folder.jpg will still see them.
(Of course, Windows Media Player may re-create or replace the folder.jpg files either way. WMP will not respect your coverart or how you want to organise your folders, which is why I protect my music folders from modification by non-admin processes.)