The last word on transparent favicons
On a techie note, the perfectionist fusspot within offers this little tip for serving favicons with transparency the 'right' way (favicons are the little pictures that appears next to the address at the top, and next to the site on bookmarks and feeds).
Lots of cunning little tricks for doing this in some clever way abound. The neatest I have seen in the wild is mentioned on Anne Van Kesteren's blog. It is very ingenious: make your image in any format, a lovely png say, call it favicon.ico, and use
AddType image/png .ico
in your .htaccess to serve it up correctly; we want to still call it favicon.ico to avoid endless 404 results when silly clients keep looking for it in the standard place.
Unfortunately, this is entirely unnecessary. IE8 still does not display png, and ico (with some fiddling in GIMP) can be made to export transparency. The easiest method is the best: Just use an ico. It is safe though to forget about <link> rules in feeds and HTML, as readers and browsers will get the favicon anyway.