This is just a bit of an experiment, but hey - it works well. It really is a pain sometimes to create a favicon (icon file) quickly, and I constantly struggle to find the perfect solution. May I introduce the (beta) version of my favicon creator:

• It supports jpg, png and gif
• Transparancies
• Automatic Resizing to 16x16
  

I'll be fine tuning it a little more, adding some better error messages, etc. Let me know your thoughts on feature-requests (if any, I know it's simple!).

Update: Find the favicon creator here