Most of us would like to add a few custom icons to some folders or file types in our computers, but the problem is difficulty to find a good tool. I was personally a victim of so called icon maker when it turned out to be a virus once. It was a long time ago and I had no computer with me. Well since then I was a lot careful with softwares.

GIMP free photo editing software
None of the normal photo editing softwares comes with an inbuilt icon support except GIMP. GIMP is shipped along with Linux. you can obtain GIMP for Linux and GIMP for Windows. Well in Gimp there is not much to do just make the image size suitable for the icon like 16*16px , 32*32px or 48*48px and select Save As ยป icon format. This is simple.
Free Photoshop Plugin
You can open, edit and save in ICO format using this plugin. You can get the PhotoShop plugin for ICO icon file at Telegraphics. It is clean and I have been using it for more than 2 years now. Just download the plugin, extract ir and save the plugin file to Adobe\Plug-Ins\Import-Export folder in your Program Files. The download is light at only 107Kb. You can also save icons in PNG format for Vista.
Free Picture to icon converter – Pinxy
Pinxy is a free Image to Icon converter. It is light at only 14Kb, needs no installation, and can open bmp, jpg, gif, wmf, emf and ico files. First open the file in pinxy then select the area of file you want to convert to icon and then Save the icon file. Its that simple. The problem is that Pinxy has been not always successful in retaining the correct color information. I failed to find Pinxy on the net except on PCWorlds site, si I have uploaded my copy to my google page. The link at bottom is to that copy. Please scan it.
Test Icon files made by me
I have made some test icons using all the above three methods. Here are the links to the files :
Photoshop Icon | Gimp Icon | Pinxy Icon | Faulty Pinxy Icon
All the direct download links are given below :
Download Phtoshop free plugin (Direct Link) | Download Pinxy from my collections | GIMP for Windows at sourceforge