For some of the more elaborate icons that have speech bubbles, I use Photoshop, or if I need to make color something in and it's too elaborate, but otherwise I just use the generic microsoft paint program and the Lexmark PhotoEditor that came with my printer (it's good for getting precise crops).

For the animated Icons, I've used various freeware GIF-making programs (right now I'm using Beneton Movie GIF), and might have to optimize them if the file is too big, or shrink the size of the icon. Beneton Movie GIF also has some LOVELY effects, such as the charcoal-outlined Meine Liebe icons and transitions.

Hope that helps.