RealWorld Icon Editor is an exceptionally powerful tool for creating new icons and managing those you have already.
The program's simple wizards will help you convert JPG, PNG, PSD, BMP or GIF images into icons, for instance.
You're also able to build icons from scratch by painting and drawing. And not with some feeble Windows Paint-like editor, either: this one supports masks, layers, shadows, special effects, and more.
RealWorld Icon Editor even includes 3D modeling features which enable to build realistic 3D models, render them, and convert the results to gorgeous 3D icons.
The program can create icons compatible with all versions of Windows, as well as Mac OS Tiger. It's also able to manage icon libraries. And RealWorld Icon Editor even has a few extensions available to add more capabilities, like the ability to run a few Photoshop-compatible image filters within the editor.
Please note, the program is available in both a Standard ($47) and Professional ($89) edition: the primary differences are that the Professional version supports batch processing options, and it provides the option to use workstation licensing, where multiple users may run the application on the same computer. Find out more on the RealWorld site