IcoFX is my preference.
IcoFX is an award winning freeware
icon editor. It is an all-in-one
solution for icon creation, extraction
and editing. It is designed to work
with Windows XP, Windows Vista,
Windows 7 and Macintosh icons
supporting transparency.
With a wealth of tools and more than
40 effects at your fingertips, there’s
virtually no limit to the icons you
can create. You can easily convert
your favorite images into icons, or
icons into images. IcoFX gives you the
possibility to create icon libraries
or change icons inside exe files.
Create a favicon for your website or
blog.
Convert your Macintosh icons to
Windows icons and vice versa. With
IcoFX you can extract icons from other
files, including Windows Vista,
Windows 7 and Macintosh files. You can
easily work with multiple files using
the batch processing capability of
IcoFX.