The icon editor is happily letting you pick and choose from the full gamut of 24-bit colors. The actual icon display is only 8-bit color, though. Not a problem, you say, who is going to have more than 256 different colors on a 32x32 icon? Unfortunately, those 256 colors are fixed by LV so you are seeing what LV deemed is the closest color amongst the 256 it has predetermined to display.
Many editors have a button you can push to coerce the arbitrary color to the restricted set (say Web-safe colors for example). I don't want this in LV, though, I want 32-bit color (ok I'd settle for 24). It would be nice, however to have an inkling of what is about to happen, since I have found many times the "closest" color chosen is probably not what I would choose.