From Compsci.ca Wiki
The favicon is the small 16px by 16px, Windows .ico file. It is stored in the root directory of the website. It is displayed in the bookmarks, in each tab and beside the address bar. It is important that the favicon, is called "favicon.ico" in all lowercase.
A problem with the favicons are that they are very strictly held in browser cache. Updates are not often seen, unless intentional action is taken.