I've been trying to create an icon in the gimp. Basically, you create an image, size it to 32X32 pixels, then save it as a .ico file. I could never get my icons to come out right, they always looked messed up.
The solution? give up trying to paste in a cool image and just draw it from scratch. That worked beautifully. I think the problem has something to do with palates, but I don't care enough about it to research it now.