A favicon is an icon you can design for your website that shows up next to the URL when someone visits. Think of it as a tiny visual business card for your Web site. Think of it as a tiny visual business card for your Web site. You can create one by visiting Genfavicon, a simple Web site who’s only purpose is to generate favicons for you:
Once you’ve created your favicon.ico file, you’ll need to upload it to the root directory of your website and add bit code in the header of your html files (Here’s a simple favicon tutorial).
Source: This tip comes directly from James Dempsey’s new The Graphic Mac. For an old-school tip on how to export favicon.ico files directly from Photoshop, we covered this back in Tips #25 How to add a Favicon to your website.