I have just posted step by step instructions on my main IM blog for making favicons (including transparent favicons).
These are the tiny logos next to the website titles on the tabs or bookmarks of your browser that more and more websites have these days.
If you are not sure what I mean, go to the link below and you should see the favicon, a tiny version of my photo in the address bar of your browser.
Favicons are very easy to create and you don't even...