IcoFX is an icon editor that enables you to create, retouch and edit icons. It supports transparency and True Color for Windows XP and Windows Vista, and offers a variety of editing tools, including gradients, blurring, sharpening, darkening and more. Other features include real-time preview, icon extraction, image import, 40+ image effects, desktop capture and more. Considering that it is free, IcoFX offers quite a nice array of features, that will meet most icon editing needs