The macosxhints Rating:

[0 to 10 lights; 10 = perfect!]

• Developer/Download: sugar cube software [Product Page]
  
• Price: Free!

This great little application takes a dropped image (or collection of images) and creates high-quality Finder icons out of the images. That's all it does, and it does it very very well.

Update: Pic2Icon works perfectly with Jaguar for me, but some users have reported problems. The sugar cube team is working on an update to address these issues.