Okay, just finished the following:
1. Uninstalled DesktopX (deleted DesktopX directory - after backing up my theme of course)
2. Rebooted
3. Reinstall DesktopX
4. Execute DesktopX with Smooth_Metal icons (by Rokey) applied
5. Same problem is occurring
When I right-click on my 'Machine' icon and choose IconX properties, it is set to display the Default icon. So I exported out the My Computer icon, as defined in the IconPackager theme, to a .png file and set my 'Machine' icons to use this image and it works fine. I could change all of my icons as what you see in the screenshot is all I have on my desktop, but I really don't want to have to worry about doing that everytime I may change themes if you know what I mean.
So, next I removed that setting on the 'Machine' icon (set it back to using the Default icon) and apply a different IP theme (iCandy Junior) with DesktopX still running and the icons are displayed properly by IconX.
Also, I verified that there is only one instance of DesktopX running at all times during all these changes. I'm stumped

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Thanks again for the help ...