HappyIcon turns large images and photos into perfectly proportioned icons, XP profile icons and cursors with a minimum of fuss. Just select a graphic in .bmp, .cam, .gif, .j6i, .jng, .jpg, .pcd, .pcx, .pic, .png, .psd, sj1, .tga, or .tif format or else scan a photo. Then check off the size(s) and color depth(s) of icon/cursor you wish to create. (That's right, HappyIcon supports multiresource .ico files.)
