badbadmonkey - 12:06 pm on Jun 7, 2009 (gmt 0)

You need to pick an image that looks good at small sizes (simple with obvious colors and shapes), and my technique for icons is to start with a large size of that image (256px +) in Photoshop, and resize each icon from that original. Experiment with different resize algorithms in Photoshop to see which works best, and you may also want to monkey with the curves before downsizing.

For favicons there is little benefit in anything more than the 16px size, that is what gets used in all browser interfaces, but having said that I always do 32px and 48px for those users who might drag links onto their desktops and I guess in the future with higher DPI monitors those sizes might start getting used more commonly as well. The size can be then kept minimal; would be nice to do Vista compatible 256px PNGs but then they go way too big.

I use IconDeveloper, give it 24-bit PNGs with transparency, from Photoshop.