I have a 32x32 favicon (in .ico format) that shows up fine in Firefox 3.6.12 and Chrome 5.0.375.70. But in Internet Explorer 7.0.5730.13 it looks terrible. It also looks bad in Windows Explorer (XP).
(Hmmm, I can't upload it - perhaps .ico format is blocked?)
(It's not IE8 but there is no other tag)