New
#1
Does it go away if you press the TAB key on your keyboard?
@tcebob
That's a common problem when the source image (jpg, png, etc.) is smaller than 128x128, but larger than 32x32. It results in a "best fit" with the ugly white border inside. Try this simple little standalone app. You just drag and drop the pic into it, and it creates a .ico file. Try to have the source a bit larger than 128x128 for best results.
SimplyIcon - Free download and software reviews - CNET Download.com
This is normal behaviour in Windows, there have been other threads about this.
It simply indicates the currently selected Windows object, in this case the icon. In older versions of Windows this border was more widely used in objects such as menus.