I found some great info, where I always do, on stackoverflow. Basically it all modern browsers request a ico file so its best to have it in case you don’t have a <link> tag. The best thing was the ico generator url on Dynamic Drive which does transparency. Just great stuff. Scroll down to the answer with the most votes, not the accepted one.
http://tools.dynamicdrive.com/favicon/
source: http://stackoverflow.com/questions/1344122/favicon-png-vs-favicon-ico-why-should-i-use-pngs-instead-of-icos
keywords: favicon png