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Internet Explorer 6, Internet Explorer 7 and Internet Explorer 8 do not support image/png type for favicon (webpage icon)
How to Add a Shortcut Icon to a Web Page at MSDN states “To create the icon, use an icon editor, such as the one included in Microsoft Visual Studio, and save the icon in the .ico file format. Internet Explorer will ignore icons that are not in .ico format, and will instead display the default Internet Explorer shortcut icon.”
why doesn’t the favicon for my site appear in IE7? by Jeff Davis, IE project manager states “It must actually be a .ico (an Icon) file. Bitmaps, pngs, gifs, etc, will not work.”
