Adobe Photoshop plug-ins are sweet. This one lets you create icons for windows, webpages( the FAVICON.ICO that shows up in your browser window and bookmark links), or whatever. This plug-in works for both Photoshop cs and cs2 and Paint Shop Pro v9. You can download this plug-in for free @ http://www.telegraphics.com.au/sw/#icoformat
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To install on Window XP
1. Copy the "ICOFormat.8bi" file into the "File Formats" folder
inside your Photoshop Plugins folder. (C:\Program Files\Adobe\Photoshop CS\Plug-Ins\File Formats OR C:\Program Files\Adobe\Adobe Photoshop CS2\Plug-Ins\File Formats)
2. Quit and relaunch Photoshop if it's already running. Now when you choose to Save As the ICO format will be an option. Note you cannot save an ICO under CMYK mode.
How to put the favicon on your website:
1. Create a 16x16 pixel file and save it as favicon.ico in the sites root folder.
2. FTP into your webhost and Copy favicon.ico into the root folder
3. in your index.html paste these items into your head
<link rel="icon" xhref="favicon.ico" mce_href="favicon.ico" type="image/x-icon" />
<link rel="shortcut icon" xhref="favicon.ico" mce_href="favicon.ico" type="image/x-icon" />