A favicon (short for favorites icon), also known as a website icon, shortcut icon, url icon, or bookmark icon is a 16x16, 32x32 or 64x64 pixel square icon associated with a particular website or webpage.

For the rest of us who are not as technical, it's that tiny picture next to the browser URL area that changes when visiting one site to the next.
  1. To add one, it is simple. First you at least need to make a 16x16 pixel icon in your graphic editing program.
  2. Convert it to the accepted .ico (for icon) file extension. There are a few favicon generators online. Here is one I often use: Favicon Generator Tool at Dynamic Drive
  3. Once you have saved the file to your computer, you will need to upload it to your web hosting space.
  4. In your layout's template, before the ending head tag, put the following code:
<link rel="shortcut icon" href="http://YOURDOMAINHERE/favicon.ico" />​

Make sure you replace "YOURDOMAINHERE" with your URL path where you have uploaded your favicon file.
Once you have done, bookmark your page. You might have to clear your computer's cache, and also restart your browser to see the changes.