png2ico - PNG to icon converter. Find out more at the link above.

After installing png2ico, the simplest thing to do to create a favicon.ico for a website is make a 16x16 image in PhotoShop or similar application, save it as a PNG file in your home directory, then open terminal and type:
/usr/local/bin/png2ico favicon.ico newlycreatedicon.png
Then upload the newly created favicon.ico to the root level of the website and it should show up as the website's icon.
Check out the program's author's more complete tutorial on how to create and install a favicon.ico

png2ico 2002-12-08 installer for Mac OS X 10.4 (tiger).
Download Installer: png2ico.pkg.tar.gz 160 KB

png2ico 2002-12-08 installer for Intel Mac OS X 10.5 (leopard) or later (tested on 10.6 snow leopard).
Download Installer: png2ico-intel.pkg.tar.gz 74 KB