Straight after posting I thought of looking at favicon specifications on wikipedia
http://en.wikipedia.org/wiki/Favicon
Apparently PNG images work as well, so I can just convert any other format submitted into PNG and resize it.
In the article mentioned above, it says that IE doesn't support anything other than .ICO, but it only goes as far as IE5. Can anybody else who have a Windows machine handy specify if the solution works for newer versions? Unfortunately - well, not really unfortunate, I am blessed
- I don't have a Windows box handy.
Hope it helps somebody in the future anyway...