Hey Kiv. Great work. Just wanted to point-out that the new icon is a bit lower in resolution; it looks rough at the edges of the circle. Thanks.
If you're using 20110327, then the reason you might be seeing an improperly matched icon is if your taskbar or title bars are displaying icons in sizes that are not 16x16, 32x32, or 48x48. For example, if your taskbar displays an icon at 24x24, Windows has a funny behavior for certain icons of picking the 16x16 over the 32x32, and so on. Fixing this would require removing the 16x16 icon out of the file, forcing windows to scale the 32x32 icon, except, Windows doesn't scale 32-bit icons using bilinear filtering. It uses nearest neighbor, which is horrible. It does do filtering for all other bit depths. So... umm... yeah, you might be stuck with a funny looking icon unless your taskbar and title bar are sized appropriately for the icon.
EDIT: Oh, I think I see what your problem is. It's not your fault, it's Windows. Looking at the properties dialog, I was seeing the 16x16 icon in the title bar like I expected. What I didn't expect, however, was that Windows decided that the taskbar (which I specifically set to display 16x16 icons) chose to load the 32x32 icon and scale it anyway. Even though the title bar was right, the taskbar was wrong. I'm kind of stumped on this one. I'll play around with the order of the images within the icon file to see if I can get Windows to do what it's supposed to do.
EDIT x2: Apparently, I can't seem to reorder the icons within the .ico file to get what I want, and I'm not the first to hit a brick wall. Apparently, this has bugged someone else.
http://www.indigorose.com/forums/threads/30291-How-to-set-16x16-version-of-an-.ico-file-as-window-iconEDIT x3: Oddly enough, I turned of Aero and hovered over the taskbar button and both the taskbar and the popout box were definately displaying icons in the size of 16x16, but the taskbar was still using the 32x32 icon resized and the popout box used the right friggen icon. Frustration... I'm giving up on this one. It seems to work everywhere but the taskbar for me. Also, that bit about the preview pane only displaying the first image in the icon was apparently wrong. This bug only seems to haunt one of my older icons, not that it matters anyway.