As an e-Book dealer I would like to use PDF files to distribute my product, but I can not as it presently stands. What I really need, is the capability to replace the present PDF file icon with the cover page of the e-book I have placed in the PDF file. Have I just missed something in the docs ?
Replace the icon on your cover page and create a new e-book from this.
Your question does not provide any details about where the PDF is being displayed (in what software, on what platform).
PDF files displayed within operating system browsers (Windows Explorer, Mac Finder) take their icon from the application associated to open the file, NOT from anything embedded within the PDF itself - so they cannot be changed. "Thumbnail" previews typically render the first page of a document.