Favorite icon appears to the left of your link in either address bar or in favorites menu of your browser. It gives your website more personality, better visibility in favorites menu and is easy to create.
Using your favorite image editor create 256 color, 16x16 pixels image and save it as a .gif, or if you are using PixelToolBox .png or .bmp file.
Open your Icon editor software and import the image you just created. If you are using PixelToolbox, on the start screen select Windows Icon; 16x16; 8 bit 256 color pallet; click start.
In the new window click Import and navigate to the image you created. Edit image if needed and save it as favicon.ico on your hard drive.
Upload the icon to the root folder of your web site.
Browser will automatically look for and display the icon you created. However, if you want to help browser find the icon put following between head tags of your web page: < link rel="shortcut icon" href="http://www.your-website.com/favicon.ico">
To test your icon, delete all temporary internet files from you machine, go to your web site and add it to your favorites folder. See how your icon looks between other links. You want your icon to stick out, so you may want to change some colors or shapes. Just make sure to clear your browser cache before you test new icons.