From Toby Thain:
ICO file format (64-Bit) is a Photoshop plugin. It gives Photoshop the ability to directly Open and Save Windows icon (.ICO) and cursor files. The plugin can create 32-bit icons with 8-bit alpha transparency. It reads and writes .ICO files of 1,4,8 bits as Indexed mode images, and 16,24,32 bit as RGB mode. When saving an icon, it is possible to save in either standard ICO or PNG (Vista) compressed formats. The latter format is not compatible with all software.