About a year ago, I reviewed SnIco Edit here at Software Gadgets. It was a nice little icon editor, however, its web site has disappeared and I've recently found an icon editor I like much better: IcoFX.
From the IcoFX web site:
IcoFX is an award winning freeware icon editor. It is an all-in-one solution for icon creation, extraction and editing. It is designed to work with Windows XP and Windows Vista icons supporting transparency.