As at http://www.w3.org/2005/10/howto-favicon,
The format for the image you have chosen must be 16x16 pixels or 32x32 pixels, using either 8-bit or 24-bit colors. The format of the image must be one of PNG (a W3C standard), GIF, or ICO.
So try to use this instead:
http://www.genfavicon.com/