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. The default icon is the Joomla! logo, but you may change it to suit your site.
By default, the Joomla! favico can be found in the /images directory. Some templates, however, will contain code that redirect the browser to /templates/template_name/icon. To determine where your new favico should be, examine /templates/index.php and look for code that resembles: <link rel="shortcut icon" href="http://yoursite.com/templates/your_template/icon/favicon.ico" >
1. create a 16x16 pixel image. You may use graphic software, or an online tool such as: http://antifavicon.com/
2. convert to ico format
3. copy it to the path outlined above.