Here's all you need to do:

1) Download and unzip the zip file.

2) You'll have a directory/folder called favicon-manager, put this into 
your plugin directory.

3) Go to your admin panel and activate the plugin.

4) Now go to Options -> Favicon Mgr

5) Enter the location of your favicon image.  It may be in 
any of several formats: ico, gif, or jpg.  There's no restriction on its 
name or location, other than that it's a valid and reachable URI.
You can always come back here and change this whenever you wish.
Changing your theme or upgrading WP will not affect this.

6) Check off where you want the favicon to appear.   There are two 
common link formats in web pages, it's okay to have either or both 
present.  If you want your feed to show the favicon (eg, in Bloglines), 
check the RSS2 and Atom options as you like.

Direct questions to:  cindy@digitalramble.com