If you added an icon and you don't see it.
The change may not be noticable because the previous image may be in the server or browser cache.
Tip: Favicon is not changing on your browser? Moodle cached the old one.
Tip: How to clear Moodle cache?
There are two ways to clear Moodle cache:
1. Theme Designer Mode:
Go to -> Settings > Site Administration > Appearance > Themes > Theme settings > Theme Designer Mode -> check box and save. Then hit your browser's refresh button. You might want to disable Theme Designer Mode after the Favicon is working.
2. Purge all caches: Go to -> Settings > Site Administration Development > Purge all caches -> you can do this at any time, but you need to refresh your browser to see any changes.
This Moodle Doc/Wikipedia article explains how it works and has some useful links to software you can use to create one. It also mentions some online utilities that can be used to convert pictures to the right format for use as a favicon. SOURCE : http://docs.moodle.org/20/en/Favicon
Edit: I've split this off the previously older post to which this comment was attached, and made it readable in its own right.
Thanks for adding this link Manish.
(Edited by Mary Evans - original submission Saturday, 19 November 2011, 11:19 AM)