Does anyone know a program that makes Icons or Cursors???
Photoshop works well for making most graphics, but if you are looking to save a file in a specific format, you may need something else.
Photoshop does NOT save in the .ico format. I’m not sure what saves in the mouse cursor format.
However, newer versions of windows let you set images (especially PNGs for their alpha layers) as icons, making them a decent standby until you can put them all together in a .ico file (Which can hold many icons).
I don’t know of a program that makes them for free though.
IIRC, the Windows mouse cursor format is just the icon format, but don’t quote me on that; I haven’t touched those parts of Windows in years, so my knowledge there may be quite rusty.
It’s funny that you should mention Windows icons and PNGs in the same post. 
png2ico - PNG to icon converter (Linux,GNU,Windows,Unix) does a pretty decent job of creating Windows icons from PNGs.
Irfanview is a nice graphics program and happens to be free. It will save in a;most any format including ico and png.
Make sure you download the plugins also.
That is a great program. I have used it a lot before. The thing I really like about it is the batch processing (including sequential numerical renaming).