We will go from this to this. Ready?
1. Open this image as a new image. Take the crop tool and crop the image as desired, but remember to keep the width and height the same. I did 900x900 from the bottom (there is nothing being cropped off the bottom of the image) and I positioned the cropping area just to the right of Mr. Tunmus's left ear.
2. Note: if you are using Photoshop and the crop-to tool, you can skip this step. If you are using Paint Shop Pro, and your resize tool works poorly like mine, follow this step. Or, is you use PSP and your resize tool works fine, just crop equal dimensions and resize to 100x100. Go to Image > Resize and put 100 into the width and height boxes. Make sure it's on 'pixels' and not 'percent'. Then select 'percent'. Click here for the screencap. I circled the pixel dimensions, this is how large your image will be if you resize it. DO NOT HIT OK, it will resize the image. This is often results in poor quality, I do this step for a reason. You'll notice the percent is 11. Take note of whatever it says in the box if you didn't crop it to 900x900 like me. Hit cancel and return to your canvas. In the overview tab in the right, (screencap) put 11 into the box (see screencap), or whatever the number from the resize window was, if you didn't make your image 900x900. The image will then zoom out quite a bit. Hit 'Print Screen' (between F12 and Scroll Lock), and then Alt+EPN. This will paste it as a new image. Zoom in to about 500 and take the crop tool. Crop out only the image, none of the canvas.
3. Zoom to 100% and sharpen twice (or once, you decide). (Adjust > Sharpness > Sharpen) Usually I only sharpen once, but this picture can stand two sharpenings. Now copy the image and open up a blank white canvas at 100x100 pixels. Paste the cropped Mr. Tumnus as a new layer. Feel free to use this icon a base for reference, but don't forget to hide it when you're done. In fact, I reccommend it, because it will help you get started, and that's how I'm doing it as I write this. Move Mr. Tumnus into the top right corner, you'll cover up some of it. If you want to see how I've done it, click here.
4. Now take the selection tool and cut some off the bottom and left (or if yours is exactly like mine, you've aligned it so that you don't need to cut any off the left). I'd take about 4 pixels off the bottom. Zoom in to 600 to do this, it's easier to count the pixels.
5. Duplicate the layer and using the move tool, drag it down below its parent layer. Make sure it stays verticall aligned. Set it so there's about 6 pixels between to two images. My explanation is a bit confusing, click here for the screencap.
6. Go to Edit > Copy Merged and paste the copied image as a new layer. Take the move tool and move it to the left, so there is 2 pixels between the two layers, and only two pixels of the layer you just pasted show. That can also be confusing, so see here.
7. Now download these brushes for your program and install them. Make a new layer called tb, or text brush or something like that that indicates what it is. Set the layer mode to normal. And if you aren't already there, zoom out to 100%.
8. See this screencap before continuing. I'm doing this so you can see which brush it is before we add it to the icon. You don't *have* to use this brush, but I do reccommend it. Now once you have that brush, take it and stamp it in between the two Tumnuses on the left. Now duplicate that layer to make the text more visible, and then right click the duplicated layer ('Copy of tb') and select Merge Down. This will make the layer darker. You don't have to do this, but I think it looks better.
9. Almost done! Take this texture from Tre and paste it as a new layer. Set the blend mode to Lighten 100%. And you're done, your icon should look something like this: