Windows XP can downscale larger icons if no closer image size is available. Microsoft only recommended icon sizes up to 48×48 pixels for Windows XP. Windows XP can be forced to use icons as large as 256×256 by modifying the Shell icon size value but this would cause all 32×32 icons throughout the shell to be upscaled. Windows XP, by default, employs 48×48 pixel icons in Windows Explorer. Windows XP added support for 32-bit color (16.7 million colors plus 8-bit alpha channel transparency) icon images, thus allowing semitransparent areas like shadows, anti-aliasing, and glass-like effects to be drawn in an icon. The notification area of the Windows taskbar was limited to 16 color icons by default until Windows Me when it was updated to support high color icons. Thus, a single icon file could store images of any size from 1×1 pixel up to 256×256 pixels (including non-square sizes) with 2 (rarely used),16, 256, 65535, or 16.7 million colors but the shell could not display very large sized icons. The Shell Icon Size value allows using larger icons in place of 32×32 icons and the Shell Small Icon Size value allows using custom sizes in place of 16×16 icons. It was possible to enable 65535 color (Highcolor) icons by either modifying the Shell Icon BPP value in the registry or by purchasing Microsoft Plus! for Windows 95. However, 256 color was the default icon color depth in Windows 95. Windows 95 also introduced a new Device Independent Bitmap (DIB) engine.

Win32 introduced support for storing icon images of up to 16.7 million colors (TrueColor) and up to 256x256 pixels in dimensions. Support for 16 colors was introduced in Windows 3.0. Icons introduced in Windows 1.0 were 32×32 pixels in size and were monochrome. The ANI file format is used for animated Windows cursors. The only differences between these two file formats are the bytes used to identify them and the addition of a hotspot in the CUR format header the hotspot is defined as the pixel offset (in x,y coordinates) from the top-left corner of the cursor image where the user is actually pointing the mouse. The CUR file format is an almost identical image file format for non-animated cursors in Microsoft Windows. In Windows, all executables that display an icon to the user, on the desktop, in the Start Menu, or in Windows Explorer, must carry the icon in ICO format. ICO files contain one or more small images at multiple sizes and color depths, such that they may be scaled appropriately. The ICO file format is an image file format for computer icons in Microsoft Windows.

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