You are adding your ICO-file in the right way, but the file is not in Windows ICO-format.
I don't know much about PhotoShop. If it has a possibility to save ICO-files, try it. If that doesn't work, save your picture as a GIF-file with transparent background.
Then download, for example, Paint.NET, IrfanView or Gimp and use it to convert GIF-file to Windows ICO-file. All those graphics apps are freeware and you can download them from http://www.download.com
Teme64
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I agree with Teme, I have used IrfanView and it definitely meets all the needs (sizing and color requirements0 for icons.
dickersonka
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