When i finally set up my toolbar to use all icons, and then i ran it and it worked perfectly fine. But when i ran the form again it looked like the way it does in the picture all discolored. So i saved exit and then came back into it and it looks the same way.
You can try removing the 16-color format of the .ico file using something like Microangelo, and only leaving the XP and 256 colors, which will cause it to use 256 colors. But that might raise an "Invalid picture" error.
The bug you're describing is a bug in the Microsoft Common Controls 5.0. Using 6.0 will fix it.
I use 5.0 though because it is capable of XP themes when using a manifest file. And I just design my images as bitmaps and avoid using icon files all-together. But you have to use a set background color which can stand out on some computers using different color themes.