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link to article on netmagazine.com

What sizes are needed?

If you were to create a favicon for every possible use. These are the sizes you would need to create:

16px: For general use in all browsers, could be displayed in the address bar, tabs or bookmarks views!
24px: Pinned Site in Internet Explorer 9
32px: New tab page in Internet Explorer, taskbar button in Windows 7+ and Safari’s ‘Read Later’ sidebar
57px: Standard iOS home screen (iPod Touch, iPhone first generation to 3G)
72px: iPad home screen icon
96px: Favicon used by the GoogleTV platform
114px: iPhone 4+ home screen icon (twice the standard size for the retina display)
128px: Chrome Web Store
195px: Opera Speed Dial

Tools to make multi resolution icons

creating multi resolution favicon using gimp gimp is free
Fricosnjohus software’s free icon maker tool

iconworkshop/ costs $70

http://icofx.ro/ costs $40

Tools to make single resolution icons

telegraphics.com free photoshop plugin

Tools that bundle image files to make multi resolution icons

png2ico free windows command line interface.
ICOBundlefree windows command line interface.