A favicon is the little icon next to your URL in the address bar of your browser. It is called an icon image. The file is a .ico file type which is created from a bitmap image.
We need to create the image. Go to your image editor (Photoshop, Paintshop, Fireworks, etc.) and open up a copy of the logo you want on your site. Shrink it down to 16x16 pixels. This means the pictures dimensions are only 16 pixels wide by 16 pixels high. You may have to play with your editor to make the image look clear and not blury.
Save the image as a bitmap file (if your image editor will save the image as a .ico image then do that instead and skip step 3). The file extension will be .bmp.
Now we need to convert the image into an .ico image. We don't recommend a specific program we did a search in http://www.download.com/ and searched for "ico". We downloaded "QTam Bitmap to Icon 3.5" just to try it and it worked great for us (little disclaimer here - I take NO responsibility for this 3rd party software). Step through the options of the conversion software to convert your bitmap into a .ico file. Be sure to select 16x16 if you are given options for file dimensions. Save the file as favicon.ico.
Move the new .ico file (favicon.ico) to your server in the images directory (or where ever you store your images).
Add the following html to your header tags:
You'll need to adjust the HREF= url to point to the right file on your server.
Here is a simplified view of what your html might look like:
