Recently I have been designing a website for a client and needed to create a a favicon image. A favicon is the graphic you see in the address bar before the URL or in the browser tab before the name of the page. The size of favicons are 16x16 or 32x32. The most supported file format for this image is ico which is not something you can just Save As in Photoshop. In the past, I have used a separate application that I had to install on my computer. I have a new computer now, so this would mean I would have to spend time to research what application would work best for my machine and this just seemed like a pain plus I was in a hurry since there was lots of testing to do for the said website.
Luckily, the good people at Punk Labs created a web application that will take many existing graphics and convert them to ico format. This is a very useful tool for web designers to have in their arsenal.
Check it out: http://converticon.com/
More about favion: http://en.wikipedia.org/wiki/Favicon