The Impa and Link Icon Tutorial: done in Adobe Photoshop 7.0, but it should be translatable.
1. Start with a white background, but then hide it because we don't want it anymore (or, just use a transparent one? Perhaps that would make more sense?)
2. Open another image that you want to use for your icon. Either crop the sides off or use one that's much taller than it is wide.
3. Sharpen it to your liking (or anything you want, really).
4. Duplicate the image you wanted for your icon (hereafter known as "base") and slide it to either side of the icon, leaving a bit of room in between the space of your main base and your new side base (or, if you cropped the sides off your icon, just use those instead with a bit of space in between the images). Colorize the layer (with the two side bases around the main base - but the main base shouldn't be a part of that layer) however you choose with #77A265 and set the layer to "color burn" with 100% opacity.
5. Duplicate the base image and drag it up top. Colorize it like you did in step four to #6769A3 and set the layer to "overlay" at 100%.
6. Make another layer and use a black or white brush (combination, too - depending on your image) or whatever you like to add dividers in between the base and side images, frames, thingies, etc. At this time I added a white line around the icon two pixels in, and then I added a black line around that. Now, set the layer to "overlay" at 100%.
7. Create a new, blank layer. Fill it in with #1B1C4A, and set it to "exclusion" at 80% (or whatever works with your image).
8. Create a new, blank layer. Fill it in with #E9A2E0, and set it to "color burn" at 37% (or whatever works with your image).
9. Create a new, blank layer. Fill it in with #D94747, and set it to "screen" at 54% (or whatever works with your image).
10. Create a new, blank layer. Fill it in with #FFFFFF, and set it to "soft light" at 100% (or whatever works with your image).
11. Duplicate the base image and drag it up top. Desaturate it and set it to "color burn" at 100%.
12. Create a new, blank layer. Fill it in with #438143, and set it to "soft light" at 100% (or whatever works with your image).
13. Add text or whatever you see fit, and ta-da!! Instant icon in thirteen (unlucky!) steps.
SHOW ME YOUR RESULTS, OKAY?! :D