So if you like a good design challenge try your hand at this one.All you need to add a Favicon to your site is a Windows Icon (.ico) file usually called that you upload to the main directory of your website.
The standard location is the “root” folder of your site, which is same directory as your home (index) page, not inside an images directory or other folder.If you put it there (and name it favicon.ico), most browsers will find it automatically.Do this by selecting File If you already have a logo you should reduce it to the 16 x 16 size to see if it holds up.If it doesn't look good at this size, work with the 64 x 64 canvas and try creating a simple design that incorporates colors from your website's palette.Some browsers will look for a direct link in the HTML source code to your site's file.
You can help these browsers by adding this link in the head section of each page on which you want the to appear.
You'll need the Windows Icon (ICO) file format Photoshop Plugin to export to the file format. The plugin reads and writes ICO files in 1, 4 and 8-bit Indexed and 24-bit RGB modes, and also reads and writes 32-bit "XP" icons (with 8-bit alpha channel).
Make sure to install the plugin before you begin this tutorial.
This is the best setting for making sure that an image doesn't blur as it's being resized.
If it’s still not sharp enough, go back and oversharpen, oversaturate and/or heighten the contrast of the original image and then resize it again.
When you're ready to test the design select Image Image Size menu and enter 16 x 16.