from MSDN:
http://msdn.microsoft.com/en-us/library/system.windows.window.icon.aspx[
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To cater to the various display sizes, an icon file is composed of one or more actual icons where each one represents a version of the icon that targets a specific size and color depth. For example, one icon may only have a single 16x16 pixel icon with 16 colors, while another may contain 16x16 pixel and 32x32 pixel icons with both 16 colors and 256 colors.
If icons for all possible sizes and color depths exist within an icon file, Window will use the appropriate icon. If an icon file contains only a subset of all the possible icons, Window uses the next most appropriate icon in order of decreasing sizes and color depth.