Hi
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Always work with a copy of your original photo. Never work with the
original photo.
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Open the copy of your photo with a photo editing program like Photoimpact
that allows you to save as in icon file.(ico)
Crop the section of the photo that you want into a perfect square since
icons are square.
Now resize the image to 32 x 32 pixels and save as ico.
Thats it.
HTH
Ken