I’ve been looking for ways how to create favicon with photoshop. I don’t want to use another software like I downloaded before. If I can use photoshop why not? save space for installing another software juz for creating favicon.
Luckily I bumped into this site and a reference to another site where to get the plugin for photoshop to use ico file format. Here’s the link to the icon plugin  and the the site where I got that url. It also includes how to create icon http://www.photoshopsupport.com/tutorials/jennifer/favicon.html