A favicon is a small, square image that appears on the browser's tab (if the browser supports tabbed browsing) and on the left side of the site URL in the address bar. A favicon's size in the file is 16x16 pixels but they can also be packed in a multi sized image supported by .ico file, e.g. a 16x16 and a 32x32 pixel image in one file. The sizes used by a browser vary, but the rendered size is always scaled to 16x16, even if a 32x32 image size is provided.
The default icon is the Joomla! logo, but you may change it to suit your site.