In researching how to create a "Favorites Icon" (those special tiny graphics next to web page links in your favorites menu) I found this nifty, free tool that allows you to automatically generate the necessary files from your source graphics file.
Upload the source image (it should ideally have equal height & width) and the site generates a favicon.ico file for you. Then, just upload that file to the root of your web site, and you're in business!

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