To know about this you must know basic terms related to PC imaging, that is pixel, image resolution, color depth, and image file format.

What is an Icon?

PC icon is a graphical symbol that signifies a property, function, or entity. In PC applications, icons are utilized to rapidly perform commands or open programs and documents. You access functionality behind an icon by clicking or double-clicking it. Operating systems frequently permit you to modify visuals of different objects by applying your own custom icons.

You may get icons from different sources or build your own. If you select to follow the more difficult but more rewarding path, you want to know more than it said.

What about the new Windows XP icon format?

There really were no changes to icon format when Windows XP was out. Windows XP is just able to make utilize of a high quality image format in an icon. Each pixel has one of 16M colors and one of 256 levels of simplicity. A pixel is no longer either opaque or transparent. Now it can be semi-transparent. The transparency level is called alpha channel.

Because of alpha channel, icon can contain shadows and smooth edges.