Hello,
Thank you for your feedback.
ICO format is very specific and used for OS(Win, Mac) necessity like thumbnail etc.
There are specific demands for ICO content (see
http://msdn.microsoft.com/en-us/library/aa511280.aspx ).
Even PSP could not save image in ICO format.
But goof free editor XnView can and it is goof news.
You can use Background Remover with XnVew in order to create needed icons.
See tutorial how to attach Background Remover to XnView at our forum
http://forum.imageskill.com/index.php/topic,1502.0.htmlRegards, ImageSkill Team