[curtiss]

After a bit of independent research, I have found that you seem to be correct, Deadeye.

Oddly enough, Internet Explorer 7 seems to restrict the favicons displayed on its tabs to indexed, 256-color graphics. It displays 24-bit 16-million color graphics in the address bar without any problem.

The worst part is that IE7 does not seem to know that it restricts the favicons displayed on the tabs to that color-depth.

I created a favicon with six different layers: 32x32 pixels with indexed color palette, 32x32 in RGB mode, 24x24 with index, 24x24 in RGB, 16x16 with index and 16x16 in RGB. It appears as though, even though I've given IE the choice of indexed and RGB, it chose the RGB version of the icon to display on the tab.

I'm just not sure how much effort I want to put into this. Nearly 50% of our current site visitors are using IE7, so it seems like it should be important. At the same time, however, it's simply a favicon, and it displays correctly everywhere I've tried it (in the address bar and favorites menu of IE7, in Firefox, in IE6, Opera, Safari and on my desktop), except for the tab bar of IE7.

I think I'm just going to optimize it as much as possible, and then let it be.

Just be forewarned, when developing favicons for your Web sites, that IE7 does not seem to know how to properly handle them.