This little thing can do so much in representing your website or brand. It can appear everywhere. The most common place for favicon to appear is in the address bar and tab bar. But there are so many other small spots that it can fill.
First, it appears in user’s bookmark list. When they bookmark a page, the browser will save the URL and show page title plus favicon. So your brand will be seen every time user look at their list of favorite website.
Favicon will also appear in RSS feeds. This only applies if you provide RSS feed on your website. If you have one, favicon will appear in the list of the feed reader such as Google Reader, right on the next of your feed. This way you’ll have a tool to attract people to read your feed.