It’s only easy with this Adobe Photoshop plugin. It’s a free and open source plugin available for Adobe Photoshop CS2 and CS3 for MacOSX and Windows. Also it works on PaintShop Pro.
To make a transparent favicon, just design your icon (32 x 32 pixels) with a transparent background. Resize your image to 16 x 16 pixels and choose ‘Save for the web’ and save the image as a GIF, with transparency on (duh!). Now reopen the GIF file and choose ‘Save as…’ and save it as a Windows Icon (.ico) file. And your done.
For an other way to do it on MacOSX with the free app ‘Graphic Converter’, check my older post ‘how-to-make-a-faviconico-on-macos-x‘.
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