A favicon is a "favorites" icon that is associated with a particular website or webpage that is displayed in the browser address bar next to a site's URL. It is also being increasingly used as a visual cue in everything from Firefox tabs to site identifiers in AJAX homepages.
Faviconr can make favicons from jpg, gif, and png files. (You can create transparent favicons if your source file is a transparent png or gif file.)
More information from the Blog: